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New Report: Major California Insurers Do Almost No Business with Minority-Owned Firms

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People of color own nearly half of California businesses but get only 3 percent of contracts

In the most diverse state in America, the 10 largest insurers do shockingly little business with suppliers owned by people of color according to a new report to be released March 13 by The Greenlining Institute.

Insurers buy huge amounts of goods and services in California – over $23 billion in 2014 alone – but the largest firms did barely over 3 percent of their contracting with businesses owned by people of color.

“Insurance is a huge economic force in California, one that all of us have to deal with,” said Greenlining Institute Diversity and Inclusion Director Danielle Beavers.

“That these companies do just 3 percent of their contracting with minority-owned businesses – in a state where people of color own nearly half of all businesses – is just pathetic.”

For Supplier Diversity Report: California’s Insurance Companies Shirk Contracting with Minorities, Greenlining reviewed reports filed with the state Department of Insurance for 2014 by the 10 largest insurers, including household names such as State Farm and GEICO.

Under a law known as AB 53, insurers that collect over $100 million in premiums in California must report their spending with businesses owned by minorities, women, disabled veterans, and LGBTQ individuals. In 2014, 226 companies filed such reports.

According to the report, these 226 companies spent a total of $23.44 billion in California, of which minority businesses received $729 million in contracts, just 3.11 percent.

Furthermore, the 10 largest insurers showed huge variations in their contracting with minority business enterprises, ranging from just $302,326 at Prudential to MetLife’s $38.58 million.

State Farm, which bought over $618 million in goods and services in California, purchased less than 2 percent of that total from minority business enterprises.

The report found that spending with different racial/ethnic groups also showed massive variations.

Of the $105 million the top 10 insurers spent with minority business enterprises, just half of 1 percent ($604,020) went to African American businesses, while nearly 60 percent ($62.55 million) was spent with Asian American firms.

Current data collection has large gaps, according to Greenlining. For example, half of the top 10 insurers do not track their total procurement within California, leaving it impossible to know what share of contracts went to minority business enterprises.

Because AB 53 sunsets in 2019, the legislature must act to make this data collection permanent, and to close gaps in the data being collected, says Greenlining.

Activism

East Oakland Community Clean-up

The office of Councilmember Treva Reid invites you to…

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Oakland Clean Up Flyer

The Oakland Post’s coverage of local news in Alameda County is supported by the Ethnic Media Sustainability Initiative, a program created by California Black Media and Ethnic Media Services to support community newspapers across California.

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Community

Many in Black Communities are Choosing Vaccination 

Inequities in health outcomes have always been with us. COVID-19 morbidity and mortality rates among African Americans rival or exceed those in heart disease, diabetes and other illnesses. Blacks sit atop most bad lists and at the bottom of most good lists. 

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Vaccination/Photo Courtesy of Shutterstock

The trail of illness and death left amid the spread of COVID-19 in Black and African American communities should come as no surprise.

Inequities in health outcomes have always been with us. COVID-19 morbidity and mortality rates among African Americans rival or exceed those in heart disease, diabetes and other illnesses. Blacks sit atop most bad lists and at the bottom of most good lists.

COVID-19 vaccinations offer us an opportunity to better balance the scale.

Unfortunately, even with widely available testing, highly effective vaccines, and extraordinary efforts by health departments to educate and encourage people of color to get vaccinated, many Black Californians remain skeptical.

We can only hope that the FDA’s full regulatory approval of the Pfizer vaccine on August 23 for those 16 and up convinces more to get the vaccine.  It’s worth noting that emergency-use authorization also remains in place for the Moderna and Johnson & Johnson shots, as well as Pfizer’s for 12- to 15-year-olds – and that all of these vaccines are safe and effective in protecting against COVID-19 and its highly contagious variants.

Eddie Fairchild and Steph Sanders were skeptical about the COVID-19 vaccine but came to understand why vaccination benefits our entire community.

Fairchild, a Sacramento insurance agent, said he knew of research that found Black and white people are often treated differently for the same health conditions leading to poorer health outcomes.

“I was hesitant,” he said. “I was going to wait and see how it panned out with everyone else.

But when a Black friend in the health care field told him he’d opted to get vaccinated, Fairchild asked him why.

“He said, ‘Risk-reward, and the risk is death.’ At that point I didn’t have to ask him what the reward was.”

With a finance degree and a belief that numbers don’t lie, Fairchild looked at the data. He learned that until 2020 the average number of Americans who died each year was about 2.6 million, but in 2020 that figure was 3.4 million. There was only one possible explanation for the death rate surge, he said.

“COVID is absolutely real,” he said, adding that three of his cousins died from the virus. “Taking all that into consideration, I decided that it’s risky to engage in the world and not be vaccinated. It made sense for me to get it.”

Racial gaps in vaccination have thankfully narrowed in recent weeks. But as of September 1, while Black people account for 6% of the state’s population, they account for 6.6% of COVID-19 deaths, which is 11% higher than the statewide rate, according to state department of public health data. Only about 55% of Black people in California have had at least one dose of the vaccine.

Reasons for the discrepancies run the gamut, from conspiracy theories like Black people are getting a less effective vaccine than whites or that the vaccine will eventually be deadly, to challenges in health care access. 

Mostly, it’s based on a lack of trust in medical and scientific institutions, which have a long history of racism and mistreating Black people.

So even when it comes to good things like vaccines, which are scientifically proven to be good for the community, it always comes back to trust.

Sanders, a Vallejo school principal, was hesitant because of the Tuskegee syphilis studies in which Black men who had the disease were intentionally not treated with penicillin. And he was dubious that an effective vaccine could be developed so quickly. 

In fact, the science and technology enabling development of the COVID-19 vaccines was in development for a more than decade before the virus emerged in 2020. The FDA authorized three vaccines for emergency use after they underwent a rigorous process and were proven through trials to be safe and effective at preventing severe COVID-19, hospitalization, and death.

He decided to get vaccinated when his school board decided last spring to bring students back into classrooms.

Today, he’s a fervent vaccine advocate. He holds “lunch and learn” forums for educators, encouraging vaccination.

“I’m a leader and people are relying on my knowledge,” he said. “I tell them, ‘Don’t make this about you, but about the people you love and care about. It’s about protecting them.’”

There is still a long way to go before Blacks achieve true health equity, but vaccination against a virus that is taking a terrible toll on our communities is a critical step in the right direction.

 

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African American News & Issues

Jobs, Mental Health, Gun Violence: Cal Leaders Discuss Helping Black Men and Boys

Services include criminal record expungement for some marijuana-related crimes; job training and placement help; mental health treatment; addiction services; housing placement and more.

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Young Black Boy Reading a Book, Stock Photo courtesy of California Black Media

The California Assembly’s Select Committee on the Status of Boys and Men of Color held a meeting last month that brought legislators face-to-face with community organizers to discuss investing in African American and other youth of color in a “post-pandemic California.”

Introducing the various panelists, committee chair Assemblymember Reggie Jones-Sawyer (D-Los Angeles), who is a member of the California Legislative Black Caucus, spoke about the bipartisan nature of the committee’s goals.

He said people from different backgrounds and political perspectives reach agreement when talking about the plight of youth of color because their conversations are based on hard numbers.

In California, per capita, Black men and boys are incarcerated more than any other group; are unhoused more than any other group; are affected by gun violence more than any other group; and in public schools, Black children’s standardized test scores fall only above children with disabilities.

“One of the things that brings both sides of the aisle together is data. What we would like to see is either internal audits or accountability measures to show that your numbers are not only successful but you’re keeping data over a period of time showing your success rate,” Jones-Sawyer said.

Committee vice-chair Assemblymember Tom Lackey (R-Palmdale), a Republican, agreed with this assertion.

“I am looking forward to the instruction that we’re going to get today,” Lackey said. “This is a part of our population that deserves the attention and a much stronger effort than has been displayed in the past.”

The first topic discussed during this meeting was gun violence, as panelists towed the line between cracking down on gun violence and preventing the over-policing of communities of color.

“How can we do this without returning to a punitive approach that grows the prisons, the jails and the criminalization of our community without achieving the public safety we so desire,” asked the Rev. Michael McBride who is known in the Bay Area as “Pastor Mike.” McBride is a social justice advocate and the national director for Urban Strategies/LIVE FREE Campaign with the Faith in Action Network.

The meeting was an opportunity for participants representing community-based organizations to share ideas with legislators with the hope of influencing their decision-making.

As of 2019, California had the seventh-lowest firearm mortality rate in the country. But with the state’s large population of almost 40 million people – the largest in the country — that still equated to 2,945 deaths that year.

“As everyone knows, there are probably too many guns in too many people’s hands who should never probably ever have guns,” Jones-Sawyer said.

Jones-Sawyer addressed the racial element of victims of gun violence in America.

“Many of those individuals were Latino and African American so it behooves us that post-pandemic, we need to figure out what we’re doing, what we need to do if we want to protect our boys and men of color,” Jones-Sawyer said.

He also offered up part of a solution.

“This year we need to infuse the California Violence Intervention and Prevention grant program (CalVIP) with a large sum. We did put in money for a large sum to fund the work that we so desperately need to get not only guns off the street but out of the hands of people who should not have them.”

The second topic on the agenda was post-pandemic mental health care.

Le Ondra Clark Harvey, chief executive officer of the California Council of Community Behavioral Health Agencies, spoke on the intersectional nature of mental health issues in communities of color.

“Historically, Black and Indigenous people of color (BIPOC) communities’ mental health and substance abuse disorder services have been impacted by several factors including access to treatment, cultural beliefs and stigma,” she said.

Largely, Clark Harvey said mental health treatment for BIPOC people has not been preventative.

“When BIPOC individuals do seek help, it tends to be at a time of crisis; at an emergency room, a psychiatric hospital or due to some type of interaction with law enforcement,” Harvey said.

She also spoke about the increase in opioid use, suicide and calls to crisis hotlines for boys and men of color.

Two of the programs in California mentioned during the meeting that are making headway on mental health problems facing Black men and boys are COVID-19 Black, an organization dedicated to lessening the effects the pandemic has had on the Black community, and Strong Family Home Visiting Program, a Los Angeles County-based program that provides in-home family support services.

Wraparound service approaches to care were also discussed as a way to shift “focus away from a traditional service-driven, problem-based approach to care and instead follows a strengths-based, needs-driven approach,” according to the California Department of Social Services.

The last topic of discussion was on career pathways and building generational wealth for communities of color.

Tara Lynn Gray, director of the California Office of the Small Business Advocate, highlighted that most of the disparities in communities of color can be traced to economics.

“Some of the challenges facing boys and men of color stem from economic challenges in their communities and lack of investment for years prior to this administration,” Gray said.

“The pandemic induced economic hardships that we’ve experienced have exacerbated those issues with many businesses closing their doors and roughly 40% of Black and Latinx businesses closed,” Gray continued.

Gray claimed that it is not all doom and gloom, however, as she mentioned what the state has done to assuage these disparities.

“The good news about the challenges we have seen is that our leadership, both in the administration and in the Legislature, have created access to programs, resources and financial assistance for small businesses to help with economic recovery and make an impact on some of the challenges facing boys and men of color,” Gray said.

Gray also spoke about investing in business opportunities for the formerly incarcerated.

Through the California Reinvestment Grant Program CalCRG, for example, the state has been directly funding community-based organizations across California to expand job and re-entry programs for Black and other men of color who were impacted by the “War on Drugs.”

Services include criminal record expungement for some marijuana-related crimes; job training and placement help; mental health treatment; addiction services; housing placement and more.

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