Memo to President Trump: Women and people of color aren’t taking over America.
Maybe someday, but not anytime soon. Yet Trump is clearly worried, signing a series of executive orders starting on Inauguration Day to eliminate diversity, equity, and inclusion programs within the federal government. A perceived overreach of affirmative action is hot-button politics, but as a policy, the hard truth is affirmative action probably didn’t go far enough.
Let’s just follow the money. The federal government awarded $637 billion in prime contracts in fiscal year 2024. Of that, a modest slice went to women-owned and so-called small disadvantaged businesses: 5 percent of prime contracts went to women-owned firms, 4 percent to Native American-owned businesses, 1.9 percent to Hispanic-owned companies, 1.8 percent to South Asian-owned ventures, 1.5 percent to Black-owned businesses, and 1.3 percent to Asian American enterprises, according to data from the US Small Business Administration.
Those numbers may seem paltry, but they count as progress. Under the Biden administration, a record amount of federal dollars flowed to small business owners of color as the government rolled out more programs to help them succeed. President Joe Biden had set a goal that 15 percent of federal spending on goods and services annually would go to small disadvantaged businesses.
That seemed reasonable. Not to Trump. His executive orders shuttered offices and initiatives that track and promote DEI, while also revoking a landmark 1965 executive order by President Lyndon Johnson that required federal contractors to comply with certain equal opportunity and affirmative action mandates. The about-face reflects a misguided notion that women and people of color have been offered unfair advantages and given a disproportionate amount of work.
“This is just about managing the perception of the values of what the country would like to see in electing their current president versus the reality,” said JocCole “JC” Burton, chief executive of Maven Construction, a Black woman-owned firm in Boston.
Burton said only 5 percent of her company’s revenues come from federal contracts, and minority-owned firms like hers capture only about 1 percent of construction dollars in Massachusetts. Killing DEI programs leaves the impression that disadvantaged groups no longer need help growing their businesses.
“Unfortunately, we don’t often deal with accurate data,” she added. “We deal with in the perception of data.”
Affirmative action policies have been in place for decades to break down barriers that have historically held back women and people of color. Progress has been slow. A gaping racial wealth gap remains. While the average white family in the United States had household wealth of nearly $1.4 million in 2022, the average Black family had just under $212,000, according to the Urban Institute, a nonprofit research group.
Winning government contracts has long been a way for entrepreneurs of color to close that gap and build wealth. Those contracts provide steady revenue and experience that can open doors to other public and private sector work.
They help more people do well, and when more people do well, the whole economy benefits. The federal government benefits too. Research indicates that diversity is better for the bottom line, creating an environment where different perspectives drive innovation.
“It’s not a zero-sum game,” said Peter Hurst Jr., chief executive of the Greater New England Minority Supplier Development Council, which helps businesses of color grow. “Increasing the success of minority businesses doesn’t necessarily come at the expense of nondiverse businesses. Rather it makes the pot bigger.”
Some disadvantaged business owners are worried that without government goals and intention, contracts will revert to the same white-owned firms the government has always worked with. Trump’s anti-DEI sentiment could also spill over into other sectors because his executive order also instructs agencies to investigate publicly traded companies, colleges and universities, and large nonprofits for “illegal discrimination or preferences.”
“It’s a little scary,” said Vicki Gray, founder and chief executive of New Chapter HI Services, a Somerville painting and property maintenance business that gets about 10 percent of its revenues from federal contracts.
As a Black woman-owned business, Gray said she already faces barriers in the white-male-dominated construction industry. Having DEI goals, both at federal and corporate levels, have been critical.
“That’s how we were able to get opportunity,” she added. “But now that’s being removed, oh my gosh, we’re back to the unknown.”
Even before Trump’s return to the White House, Gray sensed the growing backlash against DEI. She feared it could be a liability to market herself as a woman and person of color. So last September she stopped using those labels and simply describes her business as being the “best contractor here in Massachusetts.”
Similarly, after Trump’s executive orders rolling back DEI, Herby Duverné, the chief executive of Boston-based firm Windwalker Group, told his staff they should no longer mention they are a Black-owned firm in bid proposals, because it’s unlikely to help.
Duverné, who is Black, said it’s too early to know the impact of Trump’s anti-DEI directive on his company, which provides IT services and security work and gets about half of its revenue through federal contracts. Trump has replaced DEI with “merit-based opportunity,” and Duverné believes he can remain competitive.
“I have never gotten a contract solely on the fact I’m Black. I have a contract because I’m qualified,” Duverné said. “No one would give me a contract at the federal government level if I wasn’t qualified ... being a minority firm is really icing on the cake.”
Then there are businesses of color that don’t hold federal contracts but have federal dollars flowing to them from state and municipal work on everything from school lunch programs to infrastructure projects. The concern is that Trump may require entities receiving federal money to also eliminate their DEI offices and goals.
“It’s really worrisome. It is taking us back,” said Josiane Martinez, founder and chief executive of ASG, a Boston social marketing and community engagement firm. “Contracts like these have helped companies like me succeed. Latino companies are opening at a faster rate. We are growing at a faster rate.”
Ultimately, Trump’s aversion to DEI stems from fear — the fear that Black, Latino, and Asian people will surpass everyone else. What the president doesn’t realize is that Making America Great Again doesn’t have to be a zero-sum game. Diversity has always been our greatest strength.
Shirley Leung is a Business columnist and host of the Globe Opinion podcast “Say More with Shirley Leung.” Find the podcast on Apple, Spotify, and globe.com/saymore. Follow her on Threads @shirley02186
Shirley Leung is a Business columnist. She can be reached at shirley.leung@globe.com.