Black businesses face an uphill battle after an overturned racism ruling

Earlier this month, a federal judge dealt one other blow to the federal government’s efforts to shut the racial equity gap and higher serve Black and Brown communities.

The latest setback was Judge Mark Pittman’s ruling ordering the Minority Business Development Agency (MBDA) to now not take race or ethnicity into consideration when providing services to small businesses within the US.

“This is not one attack, but a series of attacks on the measures the federal government has put in place to address it,” Patrice Willoughby, senior vice chairman for global policy and impact on the National Association for the Advancement of Colored People (NAACP), told Grio.

Using the identical constitutional argument that the U.S. Supreme Court used to strike down race-conscious affirmative motion in college admissions last yr, Pittman, appointed by former President Donald Trump to the U.S. District Court for the Northern District of Texas, concluded that MBDA qualified by identifying themselves as “disadvantaged persons,” business owners violated the Equal Protection Clause of the 14th Amendment.

In other words, the judge argued that the agency violated the constitutional rights of white business owners.

“While the agency’s work may help reduce opportunity gaps facing MBEs (minority business owners), two wrongs do not make a right,” Pittman wrote in his ruling.

Elected officials and supporters are condemning the federal court’s ruling, blaming a movement led by conservatives and supported by Republican-appointed judges that’s undermining decades-long efforts to right historic wrongs which have affected Black and brown communities. Advocates fear that the MBDA ruling could further exacerbate existing racial disparities in property and wealth.

“We really should see this as a response to Black economic progress,” said Willoughby, former executive director of the Congressional Black Caucus. “It is very clear that because discrimination still exists, these programs are still needed.”

The mission of the Minority Business Development Agency is to advertise the expansion and competitiveness of minority-owned businesses within the United States. MBDA provides minority business owners with access to capital, contracts and advisory services. Ironically, the agency was founded by Republican President Richard Nixon in 1969. Under Democrat Joe Biden, it became a everlasting agency under federal law, expanding its reach nationwide.

White House press secretary Karine Jean-Pierre told the Grio that Biden is “very proud” of signing MBDA’s everlasting government status into law.

“Over the last three years, 16 million applications have started under this administration, which is important,” a Biden spokesman said. “There was definitely a boost… with minority-owned businesses starting their small businesses.”

Now that MBDA will probably be legally required to make its programs available to white business owners, experts fear it should feed into already existing patterns of implicit or explicit racial bias and further widen the racial wealth gap.

“Basically, people will do business with people they like,” Willoughby explained. “They want to increase the visibility of who can benefit underground, so that there is no oversight, no regulation, and no broader assistance when it comes to DEI.”

Samantha Tweedy, chief executive of the Black Economic Alliance, said the judge’s ruling “results in the MBDA being unable to support diverse business owners navigating an economic system that research shows is permeated by racial bias.”

“We know this is the goal of many who want to reclaim the paths of economic progress open to the Black community,” said Tweedy, who called on Congress and the White House to “step in to protect the vital role of MBDA.” ”

So far, “reversal racism” rulings that roll back race-specific programs intended to deal with racial disparities have hit college campuses, businesses and even Black farmers. These cases were largely brought by conservative activists, including millionaire Edward Blum, who championed the affirmative motion case before the Supreme Court. Blum can also be behind an ongoing lawsuit against the Black women-owned Fearless Fund, arguing that its program to extend funding for Black women entrepreneurs is discriminatory against white women-owned businesses.

“You remove the legal framework that allows them to challenge discrimination,” Willoughby explained of the growing variety of legal challenges against DEI. She said success within the courts “emboldens opponents of equality” and turns back the clock on racial progress.

“Basically (they) are trying to return America to what these opponents called the good old days, but in reality it was a white supremacist framework,” Willoughby noted, “to which black businesses and people of color really had very limited access to the benefits of this country that other people enjoyed.”

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According to the February 2024 report Brookings InstitutionWhile Black-owned businesses experienced continued growth from 2017 to 2021, the variety of Black-owned employer businesses stays disproportionate to the variety of Black people living within the United States. In 2021, Black Americans made up just 2.7% of employers, despite making up 14.4% of the population. Closing this loophole, the report argues, would stimulate the U.S. economy and create 1000’s of additional jobs.

Looking ahead to the fight against legal failures in DEI-related programs, Willoughby told the Grio that policymakers, researchers and litigants might want to increase data collection and advocacy efforts. Proponents of DEI programs might want to make “a better case in the courts” and “a stronger case for the existence of any remedy where race is linked to disadvantage.”

“Collecting data, documenting discrimination and proving that disadvantage is directly related to race” will turn out to be rather more vital, she said.

The current legal failures also reflect the indisputable fact that decisions have consequences. In addition to Trump nominating Pittman as a judge, three Supreme Court justices who joined the bulk to finish race-based affirmative motion.

“Now this court, which is hostile to issues related to race and racist measures, will continue to operate for the next decade,” Willoughby said.

“Voting is tied to Black progress,” she added. “Even if you feel disconnected, you still need to check who has your interests at heart and vote with your wallet to identify candidates who will strengthen your participation in the economic system.”

Gerren Keith Gaynor is a White House correspondent and managing editor of theGrio’s Politics section. He lives in Washington