Remembering Atlanta's First Disparity Study - American DBE Magazine

Disparity Studies Provide Evidence to Confirm Contracting Inequalities

Remembering the Impact of Atlanta’s First Disparity Study on Policies to Support Minority Business

By Marcus K. Garner

Black Lives Matter: Now that this important, but painfully underappreciated truth has been reaffirmed and reinforced, the DBE community now can dive into celebrating the continual progress for minority businesses in Atlanta and across the country.

Inclusion policy in government procurement and hiring practices is not uncommon in many local and state agencies. However, without the work (from 30 years ago) of an Atlanta team proving that disadvantaged businesses even needed support, such programs might not exist.

In June 1990, Dr. Ray Marshall, Dr. Andrew Brimmer, former Atlanta Mayor Maynard Jackson and former Atlanta City Council President Marvin Arrington marked the presentation of the Brimmer-Marshall Disparity Study to the Atlanta City Council at Atlanta City Hall.

In June 1990, the Brimmer-Marshall Study provided evidence supporting a Minority Business Program in the City of Atlanta – designed to create opportunity for black-owned and Hispanic-owned businesses to contract with the City. The groundbreaking work, led by economists Andrew Brimmer, the first black governor of the Federal Reserve; and Ray Marshall, President Jimmy Carter’s former Labor Secretary, was called a ‘Disparity Study,’ and was the catalyst for a cottage industry that has kept Affirmative Action programs going to this day. Further, it helped to galvanize the legacy of Mayor Maynard Jackson’s efforts in Atlanta to include minority enterprise in the fabric of the city’s business.

“But for the Study, minority programs wouldn’t have had market access in a whole host of industries,” said Thomas “Danny” Boston, a member of the team of economists, researchers, labor experts and attorneys who worked on the study. Through the early 1980s, public minority programs created so-called “set-asides” that required vendors and contractors doing business with government agencies to allocate a percentage of the tax dollars paying for goods or services to minority- or women-owned businesses in an effort to reverse previous discrimination.

The U.S. Supreme Court Decision in City of Richmond vs. J.A. Croson, 488 U.S. 469, determined in a 6-3 ruling that the program was unconstitutional because it violated the 14th Amendment. The ruling stated that “generalized assertions” of historic racial discrimination were not enough to justify racially based quotas for awarding government contracts. In her majority opinion, Justice Sandra Day O’Connor wrote that the Richmond program that set a 30-percent minority hiring mandate, “provides no guidance for the city’s legislative body to determine the precise scope of the injury it seeks to remedy, and would allow race-based decision-making essentially limitless in scope and duration.” The decision rendered such programs vulnerable to legal challenge, requiring what is known as strict scrutiny – a requirement of compelling interest and strict tailoring.

Any government wanting to consider the use of race-based hiring must demonstrate strong evidence of the need to resort to race-conscience programming. And even if the history is present, the remedy to that history must be specifically tailored to said history. “Many were forced to shut down right away,” Boston said. “They weren’t able to show factual predicate that would hold up in court.”

In short, affirmative action programs needed to prove statistically that the group they were trying to help exists in the marketplace, that they have the capability to do the work, and that they are willing to do the work.

The American Subcontractors Association tested that vulnerability in Atlanta by suing the city. “We were fortunate in that the leadership of Atlanta was not like a lot of other cities and didn’t just fold under the pressure of lawsuits,” said Sue Ross, who heads the City’s business development program and worked on the Study team under Marshall and Brimmer. “The tradition of Maynard Jackson that has continued through time was that Atlanta would have a robust inclusion program. Some people call it ‘the Atlanta Way.’”

Prior to the Croson ruling, when Jackson came into office in Atlanta, the city was 70 percent black, but fewer than 1 percent of the city contracts went to minority and female firms. “It was the ‘Good Ole Boys’ club for the majority of the businesses in Atlanta,” Ross said. Under Jackson and beyond, “the position of the city was that we were going to ensure equal economic opportunity in employment and hiring.”

Attorney Rodney Strong was hired by Jackson into this tradition. At the time of the Croson decision, Strong was Contract Compliance Officer for the City of Atlanta under Mayor Andrew Young, and helped assemble that first disparity study team. He said opponents of affirmative action seized on the opportunity to end set-aside programs across the country following the Croson decision.

“There would have been virtually no vehicle that would have allowed African American, Asian, and Hispanic businesses to compete for government contracts,” Strong said. “What makes the Brimmer-Marshall Study so remarkable is that people in the Atlanta group looked at it and said we believe we can meet the test of strict scrutiny.” Boston said the start of the plan was to give credibility to the team. Recruiting Marshall, at the time an economics professor at the University of Texas – and a white man – and Brimmer provided national clout.

Boston, a retired Georgia Tech professor, was one of the researchers on the program, and worked on gathering the statistical records. “We had to go to warehouses to collect boxes and boxes of data,” he said, pointing to the large amount of information only available at the time on paper. He said before collecting the data, many characterized most Black owned businesses as not being up to the task of doing contracting work with the city.

“One of the things that struck me most was that the standard perception of minority firms was that they were marginal … just a bunch of ‘mom-and pop’ operations,” Boston said. “We were able to document that that was not the case.” One example of that was an examination of Atlanta construction magnate H.J. Russell & Co., founder Herman Russell. “Prior to the minority business program he was only able to build residential at the time because of the climate,” Boston said. “After Atlanta’s anti-discrimination program, he was able to go beyond building houses and churches in just black communities.”

Alford Dempsey, now a Superior Court Judge for Fulton County in Atlanta, and then Atlanta City Attorney Marva Jones Brooks were among the lawyers brought onto the team. Franklin Lee, of the Minority Business Enterprise Legal Defense and Education Fund, was also part of the legal team. He led the gathering of anecdotal data – that is, a collection of personal accounts through interviews, public hearings, focus groups and surveys – that breathed life into the statistics that economists reviewed.

In 1990, former Atlanta City Council President Marvin Arrington, Dr. Ray Marshall, Dr. Lenora Cole Alexander, Dr. Lucy Reuben, Dr. Andrew Brimmer, former Atlanta Mayor Maynard Jackson and Rodney Strong collaborated to complete Atlanta’s first disparity study.

“One of the things that was very eye-opening in the Atlanta study was the overt discrimination by the banking industry against minority contractors gathered through interviews where we asked white and minority contractors what their experience was in getting started,” Lee said. “Almost to a T, what we heard was that the banks were a joke. They told people if they wanted a line of credit, they had to give a certified statement showing they had an equal amount of money available,” he said.

When questioned by the Study team about the same experience, white business owners were surprised by what they heard. “They looked at us like we were crazy,” Lee said.

Former Atlanta Mayor Andrew Young and Rodney Strong speak during a February 1989 press conference at Atlanta City Hall to announce the commissioning of the Brimmer-Marshall Disparity Study.

In their research, Lee said the team identified what he called the “dirty dozen” forms of discrimination. Among those indiscretions were, unequal access to capital, bonding and insurance, stereotypical attitudes, adhering to price discrimination by suppliers, unnecessarily restrictive contract specifications, overt racial animus on the work site, and bid shopping.

The combination of statistical and anecdotal evidence was enough to preserve Atlanta’s anti-discrimination program and set a precedent nationwide. The Atlanta Constitution’s editorial page even went so far as to identify the harm that legal action akin to the Croson decisions had done to the national work to redress unfair hiring and contracting practices.

“The apologists for those rulings are being proven wrong. The decisions have hurt the efforts to end discrimination in the workplace and to open economic opportunities from which blacks and other minorities have historically been shut out,” the editorial board published. Beyond saving affirmative action programs from a wave of legal action aimed to wipe them out, the Brimmer-Marshall Study helped to systematically fortify the programs.

“These programs have survived for 30 years after the Supreme Court made a ruling that could have been a death knell for anti-discrimination programs,” Strong said.

Boston said the modern-day Disparity Study has evolved to respond to new legal challenges. “Over time, as these programs were challenged, the challenges became more focused,” he said. “Those (methods) that are used today are those that withstood some challenge; eventually, evolved the regression analysis and now you have a control for experience and education.”

Strong runs Griffin & Strong, P.C., an Atlanta-based public policy consulting firm that specializes in disparity studies, and Lee has recently retired from doing similar consulting work.

As the United States reconciles with the latest in a series of black deaths at the hands of an unfair judicial system, Lee said this environment requires ongoing work to even the odds for minorities. “There continues to be a strong need for disparity studies,” he said. “There continues to be persistent business inequality in contracting and procurement.”