ST. PAUL — Gov. Mark Dayton's administration says its efforts to make state hiring and contracting more inclusive are paying off, but there is still a long way to go before all Minnesotans have equitable representation in the government workforce.
Last year, state contracts awarded to businesses owned by people of color, women and veterans grew an average of 89 percent over 2015, an increase from $40 million to $75 million. While that's impressive growth, it represents a fraction of the roughly $2.5 billion Minnesota spends with contractors each year.
Black-owned businesses saw the largest increase in state business during that time — jumping 1,075 percent between 2015 and 2017 — climbing from $135,000 to $1.5 million. Despite the large growth, black firms remained near the bottom of minority-owned businesses that received state work in 2017, only Native American businesses got fewer contracts.
Hiring of people of color by state agencies is also on the rise. About 12 percent of Minnesota's state workforce are minorities, up from 8 percent when Dayton took office in 2011.
For comparison, about 20 percent of Minnesota residents are people of color.
New focus on equity
James Burroughs, the state's Chief Inclusion Officer, said the growth in state contracts going to minority-, women- and veteran-owned businesses was the result of new focus on equity across state government. The results come after an equity audit released last February found Minnesota had some of the nation's most progressive rules for ensuring equitable opportunities, but they were poorly implemented.
State government, through hiring and contracting practices, must play a role in closing the state's economic and opportunity gaps, Burroughs said.
"We want all Minnesotans to have access to economic opportunity," he said. "We shouldn't have any Minnesotans who feel like they can't do business with the state."
'I don't think we will ever catch up'
Dianne Binns, president of the St. Paul chapter of the NAACP, said the state's efforts gave her hope, but Minnesota's racial disparities still feel insurmountable for many in communities of color.
"I'm grateful for the effort they are making," Binns said. "I'm just saying it's not enough. I don't think we will ever catch up."
Entrepreneurs of color often struggle to secure financing to start or grow their businesses and that keeps the pool of firms owned by people of color small, Binns said. The NAACP and other minority groups plan to lobby state lawmakers to further address lending and other economic disparities during the coming legislative session.
"Without access and employment there can be no improvement," Binns said.
How gains were made
State officials say the progress Minnesota has made toward more inclusive hiring and contracting has come from a mix of new training for staff, outreach to workers and business owners and specially designed programs to encourage equity.
The state has streamlined the process for minority-, women-, and veteran-owned businesses to register with the state to be eligible to bid on contracts. State purchasing agents are encouraged to consider those business, especially when projects are less than $25,000 and competitive bidding is not required.
There is also a "sheltered market" process state agencies can use limit the firms that are able to bid on certain contracts. That type of bidding accounts for about $1.5 million of the more than $2.5 billion in contracts the state awards each year.
To increase the diversity of job applicants, state agencies increased their participation in career fairs from five annually to 86 in 2017 to help minority residents learn about job opportunities.
In the coming year, state officials hope to continue their efforts on inclusive hiring and contracting with an eye on improving retention rates.
"We really looked step-by-step at things we could do immediately to make an impact," said Alice Roberts-Davis, assistant commissioner for purchasing in the state Department of Administration. "We still have more to do."