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Joe Debro on racism in construction

December 4, 2013

In November 2010, Joe Debro sent the Bay View a 200-page “book” he wrote in 1968 on racism in construction. His family has generously agreed that it be published in the Bay View. To begin, here is the prolog he wrote in 2010 to update it. “A Study of the Manpower Implications of Small Business Financing: A Survey of 149 Minority and 202 Anglo-Owned Small Businesses in Oakland, California” – i.e., how those who control the money control who gets the construction jobs and contracts – was conducted by the Oakland Small Business Development Center, which Debro headed, and supported in part by the U.S. Department of Labor. The title page shows Jack Brown and Joseph Debro as project co-directors and Agustin Jimenez as survey coordinator.

Prolog

In 1968, three of us undertook a study of the manpower implications of small business financing. We looked at the historical record of both labor and money. We found that both the control and the distribution of both were in the hands of White males in the 1870s, in the 1970s and now.

Joe Debro 'Bay Area Projects on Hold Over Racism Charges' 021210 by CBS5
On Feb. 12, 2010, Joe Debro was featured in a very provocative interview by CBS5 headlined “Bay Area Projects on Hold Over Racism Charges.” – Video frame: CBS5
In 2010, 42 years later, not much has changed. The racism that we found then has morphed into a more effective and a more subtle form of the same pathology. Major banks no longer discriminate overtly in their hiring and lending practices. These institutions have developed more subtle ways of oppressing people of color. They hire without regard to race. The people they hire are not allowed to make any loan decisions. These decisions are reserved for a whiter level of employees. All of the power in banking has been elevated to a level that reserves the power and discretion of loan approval for those who have less pigment in their skin.

My personal experiences have allowed me to look into the actual practices of banking. As a developer, I needed $75,000. I knew a senior vice president. He invited me to his office, deposited the $75,000 into an account that I opened that day. I was not required to submit a financial statement nor a profit and loss statement. He then asked me to return to the bank at my leisure and sign a loan document.

When I could not repay the loan, the senior vice president told me not to worry, he was charging off $200 million, and he would throw in my $75,000. This charge-off had no adverse effect on my credit or my ability to do business with that bank. I realize this is not normal banking practice. I also realize that such practices go on. Such practices are what allow some to get rich and others to fail.

The executive suites and the boardrooms are largely white. There has been little change since our study in 1968. The major change has been to the white woman population. The minority mantra now includes white women. These women are now used to show diversity at the board level and in the executive suite in the banking system. When I made this observation, I was reminded of a Monica Lewinsky quote. “When I go to the White house, I am going to take my knee pads.”

We looked at the historical record of both labor and money. We found that both the control and the distribution of both were in the hands of White males in the 1870s, in the 1970s and now. In 2010, 42 years later, not much has changed.

The Small Business Administration, which had not made a loan to descendants of slaves up to 1968, has changed its method of operation. The banks now have the power to make the decisions. The same banks that gave away the store in our recent real estate mess, in order to generate fees, now are in a position to lower their default rates on the backs of those who need help in their business. The qualifications are so rigged that no loan is made that results in losses to banks.

The Small Business Administration acts as guarantor for the banks, which actually make the loans. The SBA pretends it does not impose conditions on the banks. The banks pretend that they do not impose conditions on their loans. They blame the SBA. The SBA loans are often detrimental to small contractors who need capital and who need cash flow.

Public works contracts are most of the construction market. This work requires surety bonds. Surety bonds require liquid assets and unencumbered capital assets. The banks that make SBA loans tie up all of contractor’s assets. This makes it impossible for small contractors to bond. No bond, no public works contracts. No public works contracts, no work for the unemployed.

If small contractors do not work, the local unemployed do not work. Many of the craft unions no longer overtly discriminate against descendants of former slaves. Much like the banks, some of the craft unions have improved their methods of exclusion. Many skilled craft unions have developed and sold what are called pre-apprentice programs. These programs are allegedly designed to prepare an applicant for the apprenticeship test. In fact what they do is to provide jobs for some – who run the programs and keep the applicants out of the workforce for a few years.

The banks that make SBA loans tie up all of contractor’s assets. This makes it impossible for small contractors to bond. No bond, no public works contracts. No public works contracts, no work for the unemployed.

It takes longer to get into the electrical union this way than it does to become a surgeon at UC Berkeley. Pre-apprentice programs do not pay the student. The evaluation of the outcome of such programs does not depend upon how many union cards are earned from such an activity, but how many people graduate from the pre program.

If small contractors do not work, the local unemployed do not work.

The method of choice for training is on-the-job training. Small contractors used to do OJT. Now small contractors are shut out of the process because they are locked out of public works contracts.

Many craft unions are more effective locking out Afro American workers now than they were during the 1870s. They have more power. They have developed the “project labor agreement,” which is a small contractor killer. The PLA is an organizing tool for labor. It unjustly enriches unions at the expense of descendants of former slaves.

The method of choice for training is on-the-job training. Small contractors used to do OJT. Now small contractors are shut out of the process because they are locked out of public works contracts.

The other tool is to bring in travelers from right-to-work states, give them temporary union membership. This allows the trades not to train the local unemployed. This creates a pot of money in the union benefit package, which does not have to be repatriated.

The unions are unjustly enriched through these convoluted processes. They use this unjust enrichment money to buy political influence. Local politicians sell control of training and working in the crafts to the unions in exchange for reelection aid.

Money comes to jurisdictions for public works projects because of the census of the unemployed. The unemployed are counted in a jurisdiction. If that number is high enough, federal money comes to lower the number of unemployed.

That number is not lowered because the craft unions control the process. These unions set the local training rules and the local work rules. They almost always favor the large white contractors. These contractors and the trades control the training of workers and the dispatch of workers. Training and dispatch are the key levers of power in this work equation.

Small contractors do not get enough work to train the unemployed. When they do get work, the dispatch is used to provide the least productive workers in the unions to that small contractor.

Large white contractors and craft unions, through the Bureau of Apprenticeship Training, control who becomes an apprentice and who gets a union card. The unions are unjustly enriched through these convoluted processes. They use this unjust enrichment money to buy political influence. Local politicians sell control of training and working in the crafts to the unions in exchange for reelection aid.

Educational resources, skilled training resources and financing are all rationed to the descendants of former slaves. The only empowering force that is not rationed is police force. As education, training and financing are rationed to our community, so are jobs. The crime rate increases. Our communities hire more police and build more prisons.

As education, training and financing are rationed to our community, so are jobs. The crime rate increases. Our communities hire more police and build more prisons.

This is a formula for bankruptcy.

Before his passing on Nov. 5, 2013, Joseph Debro was president of Bay Area Black Builders and of Transbay Builders, a general engineering contractor. Among many other distinctions, he had been director of the California state Office of Small Business, co-founder of the National Association of Minority Contractors and a bio-chemical engineer. To send a message to his family, email his son, Dr. Karl Debro, at KDeBro@contracosta.edu.

 

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One thought on “Joe Debro on racism in construction

  1. Rev. George Brooks

    Brother Joe Debro, I'm glad to see you still in the battle for fairness and justice. I use to live there in Oakland, and published The Sunday News for several years, as well as The Chatterbox newsletter, and met you on a few occasions even though we did not know each well. I only wish that your book could be viewed and talked about all across this nation, because the same problem is still going on, and going on EVERYWHERE. But, nevertheless, kudos for your continued efforts, and stay on the battle field. I am doing the same here in the "New Confederate" South. (smile) — George Brooks

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