Good morning! My name is Christopher Emigholz, and I am the Vice President of Government Affairs for the New Jersey Business & Industry Association (NJBIA) covering economic development, tax and budget issues. On behalf of our member companies that provide more than 1 million jobs in our State and make NJBIA the largest statewide business association in the nation, thank you for the opportunity to speak with you today regarding the current state of minority-owned businesses in New Jersey and how we can better support their growth and success.
Improving support for minority-owned businesses or minority business enterprises (MBE) as they are often designated is critical to addressing the wealth gap that stubbornly exists in our state and nation, but helping minority-owned businesses also helps the whole economy. There is evidence that minority-owned businesses are growing faster than other businesses, but it is concerning that they may be closing at higher rates as well. There is some good news for these companies in New Jersey compared to our neighbors. According to data from the US Census Bureau and the US Small Business Administration (SBA), the number of minority-owned businesses in New Jersey increased by 28 percent (or 66,252) from 2012 to 2016. This increase is larger both in actual number and in percentage increase than both New York and Pennsylvania. How do we maintain and enhance New Jersey’s position as a leader in this important area? NJBIA has five strategies that may help.
- Get more data. We have some data on MBEs, but the data is not frequently updated, making it challenging to fully understand the scope and progression of MBEs. More data is always helpful and would allow better insight on state statistics, especially in this area. More information and transparency on these companies and their interactions with government is needed to better understand their challenges. For example, S-300, sponsored by Senators Pennacchio and Kean, is posted for a vote in the Senate State Government Committee as we are speaking. It would require Treasury to issue an annual report on public contracts issued to women- and minority-owned businesses, and it would help us all see if there are troubling trends or if things are moving in the right direction.
- Workforce development is essential to better supporting MBEs. From preschool through vocational-technical high schools through higher education through on-the-job training, New Jersey needs to do a better job lifting up the skill levels of the current and future workforce. A lot of education reforms and workforce development efforts naturally and rightfully are focused on traditionally under-served populations, and that needs to continue. The achievement gap in education leads to the wealth gap in the economy. Higher standards, greater accountability and more school choice, especially as it relates to vocational schools and STEM offerings, are needed to help students of color. Additionally, workforce development efforts need to include financial literacy. NJBIA partners with Junior Achievement, which does great work in K-12 financial literacy in many cities around our State. Financial empowerment for those out of school is also important, such as in A-3062, sponsored by Assemblywoman Pintor Marin and Assemblyman Moen. The bill, posted this morning in the Assembly Financial Institutions Committee, will create financial empowerment programs in four New Jersey cities.
- Tax incentives and financial support are an important part of supporting minority-owned businesses, because these tend to focus on cities where MBEs have a larger presence. The urgent need to reauthorize New Jersey’s tax incentive programs is an important step. From the Governor’s proposal to the Legislature’s various plans, all correctly include emphasis on urban economic development just as the recently expired program focused on and did wonders for Camden. Additionally, it will be important to properly utilize the federal Opportunity Zones to drive investment into our State’s urban centers. It is also encouraging to see our EDA look into the idea of a diversity seed fund to support minority-owned startups, as it recently announced.
- NJBIA recently launched our own Diversity and Inclusion Council to support businesses that embrace diversity as an essential part of doing business. It is important to create an environment where people of color can thrive as entrepreneurs, and, if successful, will then inherently better support diversity in their own businesses. NJBIA looks forward to supporting businesses that believe in diversity and to promote best practices that create a more inclusive and respectful workforce.
- NJBIA believes that the general difficulty of operating a business here in New Jersey is an issue that disproportionately harms MBEs. If the cost of doing business is too expensive for any New Jersey company because of taxes and labor costs, then a company from an area that has often struggled finding access to capital could struggle even more. If over-regulation is an impediment to all companies in our State, then a company that does not have as much experience in navigating that red tape, may be additionally challenged. If the headache of figuring out government procurement is a burden to business, then it may be a greater issue for a minority-owned business trying to land a government contract for the first time. If we make our great and diverse State better for all businesses, NJBIA believes we will lift up minority-owned businesses to an even greater extent.
NJBIA looks forward to working with this committee and our Legislature on this issue, and we would be happy to take any questions!