Wednesday, September 6, 2017

Detroit Residents Locked Out of Little Caesars Arena Hiring

One of the greatest challenges in a post-civil rights movement society is to translate black political power into black economic power. I think it's fair to say that given the stats around black unemployment, wealth and income that just giving black people the right to vote isn't enough. Just electing black politicians (or white politicians beholden to black interests) isn't enough. We need something stronger to change economic realities. I was recently reminded of this by some of the latest news concerning the construction of the new Little Caesars Arena in Detroit. This arena will be a venue for concerts and for Pistons (basketball) and Red Wings (hockey) professional games. The arena will technically be city owned but will be managed and operated (and profited from) by Olympia Entertainment, a sub company of Ilitch Holdings. The Ilitches, a local billionaire family, own Little Caesars, The Detroit Tigers, The Red Wings, a local casino, and several other venues and properties in and around Detroit, including the famed Fox Theater. If you're working in sports or entertainment in the Detroit area, chances are excellent that you're going to rub shoulders with the Ilitches at some point. 

The Ilitch family was one of the few well known Caucasian run large private businesses to maintain a continual presence in Detroit during some very lean years in the eighties and nineties. They have given charity to many (including late civil rights legend Rosa Parks) and provided good pr for the city. They have also profited nicely from some sweetheart deals, including the financing of the new arena with taxpayer backed bonds, some of which was money supposed to go to public schools. Silly me. I thought that if you were a billionaire you could finance your own arena but maybe you don't become or stay a billionaire by needlessly risking your own money. 
Racially based affirmative action for state or local public contracts/hiring is illegal in Michigan. But because Southeast Michigan has a high level of residential segregation people can avoid that ban by using city of residence as a proxy for race. Detroit, although it is becoming whiter, is still about 80% black. So as a sop to Detroit (read black) residents upset about being left out of the Detroit rebirth or concerned by the use of taxpayer money for a private interest, the city required that at least 51% of the work done on the arena be performed by Detroit workers or businesses. Well this didn't happen.

Dozens of the contractors building Little Caesars Arena have been fined a total of $2.9 million as of March for frequently not hiring at least 51 percent of Detroiters at the ongoing construction site, according to the latest data collected by the city. And that total is expected to be even higher during the push to complete construction of the $862.9 million sports and entertainment complex by early September, based on the monthly data compiled by the city agency monitoring the workforce agreements on construction sites, said Portia Roberson, director of the city’s Office of Human Rights.

An average of 27 percent of total hours worked at the arena site were performed by Detroit residents from April 2015 to March 2017, the latest monthly data available. It’s been two years, August 2015, since at least 51 percent of hours worked at the site was done by Detroit residents, data shows. The percentage of hours worked is the measure the city uses to determine how many residents the individual contractors have working at the site.

In March alone, the city cited 53 of the contractors with fines ranging from $137,613 to a unit of Motor City Electric to 26 cents to John Papalas & Co. Motor City Electric is a large electrical contractor and the Papalas firm specializes in industrial painting and sheeting services. The other 32 contracting units on site were not fined, according to city records. Several large contractors, it should be noted, have multiple units working at the site.


This isn't new. This always happens with large local projects. A new project is announced. Black leaders make a stink about not enough black people being involved. The white project managers and business owners say they will ensure that black Detroit workers and business owners get hired or get chances to bid on work. They will agree to timetables and percentages and incentive structures. And inevitably the companies or individuals involved will come up short. They will somehow not hire too many Detroiters. They'd rather pay the fines than hire Detroiters. This is what you might call "revealed preference". Your actions speak louder than your words. It's important to point out that this need not be individualized racism from the top. One local black construction company has a very good (profitable) relationship with the Ilitches. The owner shows exactly zero interest in biting the hand that in part feeds him. Money makes everyone feel better. One person is usually not in a position to buck the system.

But just because it's not necessarily personal racial animus from the boss doesn't mean there aren't racial effects taking place. Many construction jobs and contracting opportunities, union or otherwise, are filled by word of mouth, by networking, by families and friends helping each other out. If black people aren't in those networks then black people can't get those opportunities. Many of those unions have been historically hostile to black members. Metro Detroit is one of the most segregated areas in the nation. If you can't get in the game and have no track record then of course people aren't going to be willing to take chances on unproven talent where there are millions of dollars and tight deadlines at stake. You can't get hired because you have no experience but you have no experience because you can't get hired. Many of the preferred vendors for major corporations have been there for decades.

These voluntary goals and guidelines to get black people hired just aren't working. It is past time that Black Detroiters recognize this. This is really a statewide problem. I think the only way to fix it is for municipalities to refuse to subsidize, assist or even allow these sorts of deals unless there are forced guarantees that city residents will directly benefit. To paraphrase fictional cinematic "businessman" Frank White, "From now on nothing goes down unless we're involved. No arenas, no real estate, no riverfront. No nothing. A 100 yards of track gets laid for a new train, we want in. You guys got fat while everyone starved on the street. Now it's our turn."

There are important initiatives to get more Detroiters (again read Black people) into good blue collar jobs. Some of these programs have value. They should be supported and emulated.

Vann is trying to create a pipeline into predominantly white skilled trades unions that African American men like himself have not always had. "A lot of people have no clue about the skilled trades unions," he said. "They don't know about the money in it, the opportunity in it — they don't know nothing." Though small in numbers, Vann's program does what the labor union often struggles to do, said Dennis Aguirre, president of Iron Workers Local 25.

"We've done a poor job marketing ourselves to the public," Aguirre said. "That's where these programs like Dino's helps us out in marketing the skilled trades and getting our word out there." 

Before ground was broken in September 2014 on Little Caesars Arena, just 61 of the 1,500 members of Iron Workers Local 25 were from Detroit. As the massive project comes to an end, Local 25's ranks have increased to 1,700 and the number of Detroiters has inched up to 85, Aguirre said.

And to give the devil his due there are reasons besides racist hiring and recruiting practices that hinder employment of Detroiters. A crappy educational system has left a not  insignificant number of Detroit adults functionally illiterate. So black unemployment is a problem that starts early and has many historical and current causes, several of which reinforce each other. But when some companies hire people who do not speak English, I'm not completely convinced that functional illiteracy is the objective job barrier it might be say for a newspaper editor's position. A blunter more aggressive approach is required to get Detroit resident worker and business owners a better slice of the economic pie.
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