Black-owned businesses just need an even chance
Los Angeles — ''These are not the days of the '60s,'' Barry Baszile says - days when the economy was generous and social programs were blooming everywhere.
Any black who is in business today, he explains, is in business because he's beating his competition.
Mr. Baszile is a black who is in business today - his own - and doing handsomely. So he has been surprised to approach new buyers for his industrial aluminum stock and be told they have no ''set aside'' work.
What they mean is that times are lean and they don't have any extra business to throw the way of a small, black-owned firm.
Baszile laughs. He doesn't depend on anyone's generosity. He just wants a chance to quote prices, no special favors, and the prices he quotes are good and low, he says. ''We're very good at what we do.'' His robust confidence is winning. He says he has been fortunate, but he has the optimism of a man who would always be fortunate.
The hope in the black community here is that people like Baszile - a successful entrepreneur who cultivated his savvy in the mostly white world of big business - is a sign of what's to come.
The black community needs entrepreneurs. Since at least the time of Booker T. Washington, those trying to improve the lot of black America have tried to get to the heart of the issue by promoting black-owned businesses in black communities. Success, so far, has been limited.
But in spite of a hard-hitting recession and a conservative political climate which many blacks find threatening, a new chapter may be slowly opening. One black observer even calls it a ''second Reconstruction.'' It's a chapter where steadily more blacks are starting up and owning their own businesses, succeeding , and joining the American bourgeoisie. They are new soldiers, like Baszile, in the black struggle for an equal share of the nation's economy.
''If anybody can do it,'' Baszile says, ''the private sector can.''
Economic conservatism is not popular with blacks. They are more than half again as likely as whites to feel that government should help reduce differences in income, according to a recent National Urban League report. But the feeling seems to run stronger than ever among blacks that they must find their way into the economic mainstream on their own. ''Liberation,'' says Rev. Thomas Kilgore, ''must start with us, and we must be the principal characters in the drama.''
Dr. Kilgore is president of the Gathering, an influential group of black clergy in Los Angeles. He is also president of the Black Agenda, a new organization to improve the welfare of the local black community. ''No one can make us viable,'' he insists. ''We have to make ourselves viable.''
As one veteran black businessman concedes - wrestling with mixed emotions over Reaganomics and the loss of some government help to blacks: ''Some of the things we're losing, you could almost say we're better off losing in the long run.''
Baszile's rise to self-made success has been a social scientist's dream case. He learned the ropes of the business world in some major white corporations. Once a probation officer, he became the first black salesman at Hunt-Wesson Foods Inc. in the late 1960s and at Kaiser Aluminum & Chemical Corporation a few years later. In 1975 he started his own business, Baszile Metals Service. He is an aluminum distributor, largely for aircraft manufacturing.
It's a business that rides directly on the waves of the economy, so profits have suffered recently in the recession. But Baszile's share of the market has hung tight.
His explanation: ''We have some very good people here - many of whom come from disadvantaged neighborhoods.''
The start-up money was all private, he says. He smiles, because much of that private money was his own, from real estate investments. Now the firm turns over about $5 million a year, it does business all over the world, and Baszile lives in exclusive Palos Verdes Estates.
It was the civil rights movement that opened his career doors. Even though he was not taken on by Hunt-Wesson or Kaiser to fill any legal quota, he notes, he would not have been hired if the affirmative-action laws hadn't been on the books.
Since Baszile's time, affirmative-action laws have brought noticeably greater numbers of blacks into graduate schools of business and engineering. This, according to Richard America, director of program evaluation at the Small Business Administration (SBA) in Washington, will carry a payoff that is only now beginning to show up.
The pattern generally leads from graduate school to large corporations, where the young professionals learn their way around the business world. After 10 or 15 years of this kind of big-business apprenticeship, they have enough experience to strike out on their own.
Since affirmative action began in the late '60s, the first group of blacks to enter this cycle are just beginning to trickle into the pool of promising entrepreneurs.
Of course, there's room for entrepreneurs who were high school dropouts as well, Mr. America says, but they need some kind of apprenticeship, a mentor, some solid experience, ''not just hope.''
It will take a couple of generations, however, before the full effect of these new entrepreneurs is felt in the black -community, he says. ''I look to the year 2020.''
In the meantime, businessmen like Baszile will make their way in a white world. In his case, there aren't more than five buyers of his product in the country who are black, he points out, and ''I've never talked to a black bank in my life.''
Does he encounter prejudice?
''I'm sure.'' He answers without concern. ''But probably just a misconception about what we have to offer.''
The misconceptions go way back. Dr. Kilgore traces them to Reconstruction. Then, with newfound freedom and some government aid, many blacks without experience or expertise started businesses. Many failed.
Again in the 1920s, many businesses in the South - black and white - collapsed. For blacks, the stigma stuck. Bad experiences left a sense, both among whites and among blacks themselves, that white institutions were more successful than black.
Kilgore quotes a bitter old saw that ''white ice runs colder than black ice.''
This is a myth black entrepreneurs are still up against. It hits hardest when they try to get financing from banks to get through the rough first three to five years of a business.
For the moneylender, there's a risk. Whether or not to give someone a loan demands subjective decisions - judgment calls. Says John Mack, president of the Los Angeles Urban League and a vice-president of the Black Agenda:
''This is where the black businessman can get into trouble. Deep down, financial people may be uncomfortable with a black manager.''
For instance, two young black businessmen known to Mr. Mack have started a towelmaking enterprise. They won commitments from two potentially big accounts: Hilton Hotels and the Los Angeles Olympic Organizing Committee. Yet months later they were still struggling to persuade a bank to lend them the money they needed to get off the ground.
Whether race plays a subtle part in a scene like this, no one can tell for sure.Is it racism that has held black business back all along?
This is the subject of hot argument these days.
Conservative blacks, most notably a Hoover Institution economist, Thomas Sowell, deny that discrimination has been the deciding factor in black economic life. Sowell points out that other ethnic groups - also heavily discriminated against - have done better than blacks. So have blacks from the West Indies, who presumably meet the same prejudice as other blacks in this country.
This view is not popular with blacks.
''Any black or any white that doesn't perceive the pervasive racism in life in this country is naive,'' says Dr. Kilgore with quiet force.
It can be subtle. Near his former home in North Carolina, for example, Dr. Kilgore recalls that an established white-owned bank refused to open a branch in an area undergoing revitalization. Finally, a less-established black-owned bank came in. Only then did the bigger bank make a move and effectively elbow out its competitor. In this, and in cases like it, Kilgore sees racism at work, undermining black progress.
Other observers, like the SBA's Richard America, say that American blacks have formed successful business communities since the 17th century, but that they have been consistently undermined through legislation, held back by bigger white companies that haven't hired and trained them, and denied funding by banks.
In the black neighborhoods of modern-day Los Angeles, certain kinds of enterprises are pervasively black owned and run: undertakers, churches (an important source of leadership in black communities), and dry cleaners.
Otherwise, says Elbert Hudson, president of Broadway Federal Savings and a director on Black Agenda's board, ''We have mama-papa shops, service industries, but we really don't have the manufacturing jobs that produce other jobs.''
One question is how well black communities with low -income levels can support business. And just as important is how well bank officers think the black community can support business.
An emerging strategy now, according to William Bradford, a professor of finance at the University of Maryland, College Park, is for black businesses to settle on the periphery of the black community. This way they can serve the community without depending on it.
Most important, Kilgore says, is for black-owned business to supply these vital needs: what people eat, what they wear, and what they put into their cars.
A longstanding irony of this kind of endeavor is that as business people join the middle- and upper-middle classes, they move out of poorer neighborhoods and take their spending money with them. Barry Baszile is one of these. He is a practical man: ''I go where I can get the best bargain for my dollar,'' he says.
At the same time, crime has reached a scale where -Richard America feels he has ''come around 180 degrees in the last 10 years'' to rate it as the No. 1 problem in the nation's ghettos. When it's safe to open retail shops in a neighborhood, he says, people will do it.
Still, the sweep of history seems to be heading in the black businessman's favor. Sethard Fisher, a professor of sociology at the University of California at Santa Barbara, who specializes in race relations, sees the present era as a second Reconstruction. Blacks have more upward mobility in this country now than ever before, he says. This is most obvious in higher education, where the proportion of black students keeps growing every year. And certain categories of blacks, Fisher notes, actually make higher average incomes than their comparable white counterparts.
The upshot, and the theme of his just-published book, ''From Margin to Mainstream,'' is that blacks have successfully moved from ''the social status of a caste to that of a differentiated class entity.'' In other words, blacks may still be bunched into the lower classes. But all class levels are increasingly open to them and they are finding their way up.
''I don't know any black guys who want to be given anything,'' remarks Baszile.''. . . We just want the obstacles out of the way.''