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Unit 1
Passage 1 (1/63)
(This passage was written in 1978.
Recent years have brought minority-owned businesses in the United States unprecedented opportunities—as
well as new and significant risks. Civil rights activists have long argued that one of the principal reasons why Blacks,
Hispanics, and other minority groups have difficulty establishing themselves in business is that they lack access to
the sizable orders and subcontracts that are generated by large companies. Now Congress, in apparent agreement,
5 has required by law that businesses awarded federal contracts of more than $500,000 do their best to find minority
subcontractors and record their efforts to do so on forms filed with the government. Indeed, some federal and
local agencies have gone so far as to set specific percentage goals for apportioning parts of public works contracts
to minority enterprises.
Corporate response appears to have been substantial. According to figures collected in 1977, the total of
10 corporate contracts with minority businesses rose from $77 million in 1972 to $1.1 billion in 1977. The projected
total of corporate contracts with minority businesses for the early 1980’s is estimated to be over 53 billion per year
with no letup anticipated in the next decade. Promising as it is for minority businesses, this increased patronage
poses dangers for them, too. First, minority firms risk expanding too fast and overextending themselves financially,
since most are small concerns and, unlike large businesses, they often need to make substantial investments in
15 new plants, staff, equipment, and the like in order to perform work subcontracted to them. If, thereafter, their
subcontracts are for
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