Do Racial Set-Aside Programs Create Opportunities for Blacks? It Appears They Do.

The philosophical issue: Can discriminating in favor of African-Americans today recompense for discrimination against African-Americans in the past?

Government set-aside programs for minorities have had a positive impact on the rate of business formation by African-Americans, conclude the authors of a new study, “Impact of City Contracting Set-Asides on Black Self-Employment and Employment,” published by the National Bureau of Economic Research.

Write the authors: “Black business ownership rates increased significantly after program initiation, with the black-white self-employment gap falling by three percentage points (25-40 percent). ”

The white-black employment gap closed as well. Black gains were concentrated in industries affected by the set-asides and accrued primarily to better educated blacks. “It appears that city programs led to a reallocation of self-employment from white to black men.”

Bacon’s bottom line: As a matter of philosophical principle, I dislike programs that divvy up the spoils of government spending by race. Such programs make a mockery of creating a color-blind society. As a practical matter, however, I acknowledge the history of discrimination against African-Americans and I see the logic (even if I disagree with it) of enacting policies to compensate for past injustice. The value of this study is that it demonstrates that set-side policies actually do accomplish what they set out to do (something you can’t take for granted), which is increase business and employment opportunities for African-Americans.

A couple more observations. First, it appears from this study that the primary beneficiaries are educated African-Americans, who, we can assume, tend to be better off than their less-educated brethren. Therefore, while set-aside programs arguably may comprise a rough form of racial justice, they seem less likely to constitute an effective anti-poverty program.

Second, the article does not address the effect of set-asides for other minorities who have suffered no history of discrimination at all, at least not in Virginia. In the Old Dominion, for instance, many winners of minority contracts are Hispanic or Asian — and many of them are immigrants! It is exceedingly difficult to argue that immigrant Hispanics and Asians living in Virginia today have suffered from discrimination in access to government contracts. Indeed, it would be interesting to know the extent to which these new-comer minorities have displaced African-Americans in the competition for racial spoils.

Share this article


(comments below)


(comments below)


3 responses to “Do Racial Set-Aside Programs Create Opportunities for Blacks? It Appears They Do.”

  1. larryg Avatar

    Did somebody say Asians building the transcontinental railroad as virtual slaves?

    Guest worker Hispanics will work slave-like with longer hours for less pay than local blacks.

  2. Last time I checked, the trans-continental railroad did not run through Virginia. Maybe you know something that I don’t.

  3. larryg Avatar

    discrimination does not really recognize state boundaries ….and where did the study reference Virginia only?

    do you think that Asians or Hispanics that have moved to Virginia were not impacted by discrimination wherever they came from?

    there is no question that all 3 of their minorities have been the subject of discriminatory practices….

Leave a Reply