Editor's note: This story is Part 3 in a weeklong series about racism in the construction industry. Click here for the rest of the package.
Greg Page, the president of Waldorf, Maryland-based Page Building Group, has a proven business strategy when it comes to applying for financing: Send in the White guy.
That was the approach he took when he needed $500,000 to fund the expansion of his previous company to work on government contracts, including a project for the Army in Belize.
“As a small business, it's expensive to stretch your resources like that, and we didn’t have that kind of capital,” said Page, who is Black. “The only reason we got the line of credit was because my No. 2 was a White guy. I sent him to the bank with our admin, they got it 90% of the way, and by the time I signed the deal, that was the first time they saw I was Black.”
Page couldn’t provide evidence that he would have been denied financing, had the bank known the color of his skin, although redlining of people of color by banks has been well documented. Instead, Page’s 25-year career in construction and the surprise on the banker’s face were all he needed to intuit what the outcome might have been.
“They wouldn’t just give me a half a million dollar line of credit — are you crazy?” Page said. “On paper we were fine, but the look on his face when I showed up, it was like, ‘I wish we had known.’ But by that point, they couldn’t take it back.”
Not just nooses and graffiti
While racist incidents of nooses and hateful graffiti on jobsites have made headlines in 2020, racism has been pervasive in the industry for years, and often manifests itself in more subtle, systemic ways.
Whether it’s visitors to a jobsite looking for the White boss when the foreman is Black, apprentices of color being assigned menial tasks instead of ones that teach trade skills or minority-owned businesses being stigmatized on the jobsite, it’s the systemic — and often unconscious — bias that makes up the more commonplace form of racism in construction, according to sources interviewed for this series.
“The racial slurs, the racist signs like nooses, the racist graffiti in the port-a-potties, all of that is pretty immediate, and obvious to see,” said Maura Kelly, associate professor of sociology at Portland State University in Oregon who has studied racism in construction. “But that is really just the tip of the iceberg.”
For instance, a Black master plumber in Cincinnati who runs a crew on the jobsite and requested anonymity to speak candidly, said some people report to work looking for the lead tradesman, and seek out anyone but him.
“Just the other day, a White guy comes in, looks at me, and says, ‘Where’s your boss?’” the plumber said. “Well, I’m the lead plumber, so I’m the boss. But it’s like, 'What do you mean, where’s the boss? Were you expecting, a White guy?'”
Leon Araiza, a Native American contractor in Salem, Oregon, said he’s also typically the last person that building inspectors query when they arrive on his jobs.
“It happens more often than not,” Araiza said. “When officials come around, whether they’re inspectors or contracting officers, unless I insert myself, they’ll pick out my non-Native, White employees to talk to first.”
Nate McCoy, executive director of the Portland, Oregon chapter of the National Association of Minority Contractors, said the fact that many people get into construction through family members reinforces the lack of diversity in an industry that is 88% White. That compares to 78% across all industries, according to the Bureau of Labor Statistics. By contrast, just 6% of construction workers are Black or African American, half of the 12% in the general workforce.
“We call it the ‘FBI,’” said McCoy, who is Black. “That’s the way you get into construction: through your father, brother or in-laws.”
Calvin Williams, CEO of Lansing, Illinois-based Construction Contracting Services and Midwest Region vice chair of Associated Builders and Contractors, said those statistics uncover a deeper truth about human nature.
“People hire people who look like them,” said Williams, who is Black, and holds a degree in psychology. “If you don’t have a lot of experience working with African Americans or Hispanics, you’re not going to be comfortable with them.”
To him, that aspect of systemic racism runs throughout the industry. “In the sense that people are not hiring, or are not willing to work with minorities, that’s what I consider systemic racism,” Williams said. “Because it's embedded into the process of both personnel and contracting opportunities.”
Construction’s “FBI” also keeps people of color from jobsite networking and better positions down the road. Pat Daniels, executive director of Portland, Oregon-based Constructing Hope, which trains previously incarcerated individuals in the trades, said her students of color avoid speaking to each other at work, because doing so leaves them open to reprimands for slacking off.
“Black men on the job will not stop and talk to each other, even on break, because then they’re seen as not working,” said Daniels, who is Black. “Networking in the construction industry is a very powerful thing. It’s the way you find your next job. There’s a network for White guys, but there’s not a network for people of color.”
Kelly has found similar evidence in her research.
“We see that women and people of color don't get access to those kinds of professional relationships on the job,” Kelly said.
Sweeping instead of learning
Construction’s apprenticeship hierarchy feeds systemic racism when apprentices of color are sometimes assigned menial work instead of tasks that will help them learn their trade.
“Somebody is teaching the White apprentices the job, but my guys are just sweeping,” said Daniels. “So if you’re doing minor tasks that aren’t teaching you new skills, you can’t move up in the ranks. And if you do become a second-term apprentice, you’re going to get fired from your next job for not knowing the things you should.”
Research by Kelly’s team at Portland State University quantified how apprentices of color didn’t receive as much informal mentorship as White men, while completion rates for apprenticeship programs by people of color were significantly lower than those of White men. While 57% of White men completed apprenticeships in 2016-2017, only 41% of men of color finished.
“I would tie that directly to racist attitudes in the trades,” said Kelly.
To improve those numbers, contractors and unions offer programs to entice more people of color into apprenticeship programs. For instance, the Building and Construction Trades Council of Greater New York recently launched an apprenticeship readiness program to recruit workers from neighborhoods with large populations of people of color.
“The concerns about diversity are valid,” said Nicole Bertrán, executive vice president of The Edward J. Malloy Initiative for Construction Skills, one of several entities coordinating the program. “That’s why these organizations exist.”
Another initiative is the Community Builders Program, funded by a grant from ABC's Illinois Chapter, which teaches in-demand pre-apprenticeship construction craft skills and provides career placements for participants. The program, which recruits students of color from inner-city areas, has graduated 144 workers, who earn an average starting hourly wage of $17.58.
"When they graduate from that 10- to 12-week program, they've got the basic skills to go and choose a trade to focus on," said Williams. "It goes beyond training by addressing the hiring issue, and getting diversity into our membership."
The impacts of systemic racism also land where employees feel it most: their paychecks. A 2018 study by the Illinois Economic Policy Institute found Black construction workers earn just 74 cents for every dollar their White counterparts make in states without prevailing wage regulations, and 88 cents in states with prevailing wage laws. Other studies have consistently shown compensation disparities by race in construction.
The Black plumber in Cincinnati said he experienced that Black-White pay gap firsthand. “I started at this company at $11 dollars an hour,” the plumber said. “But a White friend of mine started about a year later, with the same amount of experience, and they started him off at $14.50.”
The downside to MBE special programs
Even initiatives meant to include more minority-owned businesses on projects can sometimes backfire on the firms they are designed to help, according to Page.
For example, when Page ran Hermosa Construction in Atlanta in the 2000s, he certified the firm as a federal Disadvantaged Business Enterprise and a Small Disadvantaged Business and also participated in the Small Business Administration’s 8(a) Business Development Program.
Each certification is aimed at helping disadvantaged and minority-owned businesses get access to government projects, which have inclusivity goals for these firms, and are more broadly referred to as Minority Business Enterprise programs.
These types of programs make a difference for small businesses across the country. For example, according to the Congressional Research Service, in fiscal year 2019, the federal government awarded nearly $30.4 billion in contracts to SBA 8(a) firms.
But while those programs helped Page grow to nearly $30 million in annual revenue, he said there is an unspoken downside to certification.
“When you certify an entity as disadvantaged, you’ve basically tagged me as high risk with the other stakeholders on that project,” Page said, because small and minority-owned businesses are typically less well capitalized, and may have more financing challenges during the course of a long project. The result, in Page's experience, is that his firm would get the least desirable jobs on large projects.
“It's typically what's left over,” Page said. “It's never the critical trades. Usually it’s just the flat work, maybe some rough carpentry, or pushing on the subcontractors to somehow, someway include your guys on the job.”
That push, though, sometimes breeds resentment from other subcontractors on projects, according to Page.
“The fact that I show up on site and I’m certified, the attitude is the only way I got there was because of my certification,” Page said. “So you start off as a lower-rate contractor, even if you've got the greatest carpenters in the world.”
Getting jobs but not capital
Securing enough financing to propel his firm through larger jobs was also a problem for Delbert Jordan, the president of Richmond Heights, Ohio-based road builder Pro Construction, even though he was MBE certified.
“You get access to the work, but you don't get access to capital,” said Jordan, who is Black.
Indeed, according to the Small Business Administration’s Office of Advocacy, “minority-owned firms tend to be smaller and less profitable; and they carry lower survival rates than their ... non-minority counterparts. One part of the puzzle of these disparate outcomes rests with available credit.”
Another problem with MBE certification sometimes comes when the job is done, Williams said.
“When that project is over, the first person to be laid off is that Black guy or the Hispanic guy,” he said. “I’ve seen contractors do it. So that doesn’t really resolve anything.”
Instead, Williams said firms should make authentic efforts to put people of color on their payrolls permanently.
“If you're really working to combat racism, then you make a conscious effort to find minority workers who are qualified, and bring them onto your team,” Williams said.
For the reasons stated here, both Jordan and Page stopped pursuing jobs under MBE certification. “Being certified as a minority company is not what everybody thinks,” Jordan said. “It is not no easy walk.”
Many construction firms strive to include minority-owned businesses on projects and recognize the challenges that they face. For example, Bethesda, Maryland-based Clark Construction and its affiliate Edgemoor Infrastructure & Real Estate set a goal of including 20% MBE participation at the $1.5 billion Kansas City International Airport terminal project.
To meet that goal, the partners developed programs to support MBE firms, including a low-interest loan program, an equipment rental program and a pay-without-delay program.
“Through these programs, we are investing in small businesses’ potential,” said Mark Goodwin, vice president at Clark and lead contractor in Clark | Weitz | Clarkson, the joint venture responsible for design-build efforts on the new terminal project. “We’ll continue to determine ways that minority- and women-owned firms can contribute to the construction effort in a meaningful way.”
While those kinds of efforts show progress is being made, people interviewed for this series said there’s still a lot of work to do to unravel the negative effects of entrenched discrimination.
“These types of systemic challenges are not going to be addressed with a one-off approach,” said Williams. “You have to create and weave this goal into every fiber of your company.”