Expert: Investing in minority-owned businesses helps Arizona economy

PHOENIX — Thirty companies in Arizona have been recognized for their contributions to minority- and women-owned businesses in the state.

The companies were inducted into the AZ Million Dollar Circle of Excellence, which requires them to spend a $1 million each year on minority and women-owned businesses to be included.

These businesses — and others like it — have a huge impact on Arizona’s economy, according to a local economist.

“These larger businesses that hire these smaller, minority-owned businesses spend about $500 million a year on these contracts,” said Jim Rounds, an economist with the Valley-based Rounds Consulting Group.

That money equates to about 9,000 jobs, $400 million in total wages and $35 million in state and local tax collections, according to Rounds.

“The goal is to not only expand [those numbers], but to blend this in with other components of how we’re trying to build the economy and have everybody benefit,” he said.

The wages in those businesses are significantly lower than the industry as a whole, according to Rounds.

Minority-owned businesses have wages that are about 80 percent of the broader industry as a whole, while women-owned businesses are making about 60 percent of the industry, Rounds said.

Rounds said making more venture capital available to minority- and women-owned businesses or helping them secure high-profile contracts would benefit the state’s economy overall.

“The conclusion … [isn’t] just to try to monetize some of these impacts,” Rounds said. “This [could lead] to the possible formation of some new policy.”

Related

Arizona voters to choose Republican and Democratic nominees for top education positionRetired Gilbert fire captain honored after dying from job-related cancerStorms make way into Valley with strong winds, scattered showers causing power outages4-year-old boy dies a month after being pulled from Phoenix apartment poolTucson Police identify, charge mass shooting suspect who left 9 injuredNBA star James Harden among investors bringing Smiling Moose Sandwich Grill to Scottsdale