In 1984, Margaret Werner slipped and fell on a granite ramp at the State of Illinois Center in Chicago. She then sued Precision Contractors Inc., the company that had been commissioned to build the ramp.
The owner, a black Chicagoan named Noah Robinson whose entrepreneurial career has since been interrupted by a stay in federal prison for murder, racketeering and other lapses in judgment, had an excellent defense. Although his firm had gotten the contract under a state law designed to benefit minority-owned businesses, Robinson said he had subcontracted all the work to a white-owned company. Not only had his firm not done the work, he said, but no Precision employee had ever set foot on the site.
Welcome to the world of minority set-asides, which, thanks to the Supreme Court’s ruling Monday, is about to get a lot smaller. In a decision involving an affirmative-action system for federal contracts, a majority of the justices concluded that constitutional rights are in danger “whenever the government treats any person unequally because of his or her race.” Reasonable people may differ on the court’s constitutional vision, but if the verdict is the death knell of these racial preferences, no one should mourn.
Affirmative-action advocates speak in noble terms about overcoming the
grim legacy of discrimination and forging a society of genuine racial equality, and some types of racial preferences may actually advance those goals. But minority set-asides are not one of them. In practice, they have been nothing more than a seamy form of racial spoils, in which individuals who have not been oppressed gain at the expense of people who never oppressed them.
Robinson is not unusual in running a profitable scam behind the curtain of affirmative action. There are many ways to take advantage of minority preferences. White companies can hire black “front men” to get special breaks. Businessmen can put their wives in nominal charge of their firms. Blacks can set up companies that do no real work but exist only to get set-aside contracts for work that is turned over, for a fee, to a legitimate non-minority operation.
Minority companies can remain for years in the protected domain of set-asides, which are supposed to prepare them to compete unassisted. In fact, successful “graduates” of these programs are more the exception than the rule.
Then there is the troublesome fact that most of the beneficiaries are solidly middle-class or even wealthy. This week, The Wall Street Journal profiled a Hispanic woman who owns a firm with $10 million in revenues that pays her a salary of $100,000 a year–and who gets three-quarters of her business from a federal set-aside program for the “socially and economically disadvantaged.” How this helps poor Latinos is anyone’s guess.
The practice of reserving contracts for minorities has been highly indiscriminate in other ways, too. Anyone can understand why Americans might want to compensate blacks and Native Americans for centuries of oppression, but the moral imperative is missing in the case of Hispanics and Asian-Americans. Most of them are here because the United States gave them a chance to escape poverty and despotism. Why should white Americans now do penance for that generosity? In the case of Asian-Americans, the compensation goes to people who collectively enjoy the highest per capita income of any ethnic group in this country, including whites.
But when you get into the business of handing out privileges on the basis of race and ethnicity, it is hard to stay within limits. Every group expects to get its fair share of the loot, and politicians know that the simplest way to assure good relations is to let them have it.
Affirmative action is often defended on the grounds that while we would all prefer truly colorblind decisions, we don’t know how to assure them, so we have to set quotas as a next-best solution. But in the case of most government contracts, you can get colorblind decisions through sealed, competitive bidding. If you submit the low bid, you get the job. Your color is no help or hindrance. It’s the equivalent of auditioning musicians behind a screen.
This approach also offers the advantage of minimizing costs. Giving special breaks to minority businesses automatically means the government has to spend more money to get a job done–since if they were the lowest bidder, they wouldn’t need the break. This may help a few black and Hispanic business people, but only at the expense of the great mass of black and Hispanic taxpayers.
Abolishing government set-asides will seriously inconvenience the Noah Robinsons of the world, whose chief business skill is knowing how to turn their complexions into cash. But for the vast majority of minority Americans, it will be no loss.
