In the same time period, the total number of businesses increased 18% to 27.1 million.

The new data come from the Preliminary Estimates of Business Ownership by Gender, Ethnicity, Race and Veteran Status, culled from the census bureau’s 2007 survey of business owners.

The same report found that black-owned businesses rose 60.5%, Native American and Alaska Native-owned businesses climbed a combined 17.9% and the number of Hispanic businesses gained 43.6%.

Other highlights of the report:

• Of the nation’s 27.1 million businesses, roughly 5.8 million had paid employees. These businesses employed 118.7 million people, a 7.1% increase from 2002.

• Of the 5.8 million minority-owned businesses in 2007, an estimated 5 million had no paid employees.

• The number of women-owned businesses totaled 7.8 million in 2007, up 20.1% from 2002. Men-owned businesses totaled 13.9 million, up 5.5% from 2002.

• There were 1.9 million black-owned businesses in 2007, up 60.5%, with 37.6% of them in healthcare and social assistance, repair and maintenance, and personal and laundry services.

She believes that her business, J-MOS, is in a good position — both literally and figuratively — to be part the biggest public-works project in state history: the $957 million Central Corridor project, which is gearing up for major construction this summer.

She’s so intent on being part of light rail history that she recently leased warehouse space on Endicott Street in St. Paul, a few blocks from the planned route of the Central Corridor, which will link the Twin Cities’ downtowns when it starts running in 2014. And she’s hoping to hire five to 10 additional employees.

Full story…

According to a story in the Providence Journal, Wallace was certified as a minority owned business and eligible to participate in federally-funded transportation projects that targeted contracting/subcontracting a portion of the business with minority owned businesses. Christina Rosciti, the daughter of a principal in a much larger construction firm, purchased a 49% interest in Wallace apparently for the sole purpose of using it as a front to keep more of the business in the family.

All was going swimmingly until the founder Wallace (an African American male) died, and the authorities began to question the firm’s minority status. In order to qualify for the federal minority owned business program (and most state and local programs), firms must be majority owned AND controlled by minorities. After the founder’s widow assumed the title of President, the firm had its minority status reinstated.

The reinstatement occurred in spite of several disturbing facts. Neither the founder’s widow nor Rosciti had any previous executive management experience. Rosciti had not paid taxes in years and clearly lacked the financial resources to buy her equity stake in Wallace, which was not a successful business until becoming the beneficiary of millions of dollars of business from Rosciti’s family businesses. There was also evidence that 15 employees were employed by both Wallace and Rosciti’s companies.

Minority business programs are intended to give legitimate companies opportunities to compete and grow. If a majority company acquires a significant interest in a minority owned company, brings in its own people, and funnels business to it, the minority owner becomes nothing more than a front for the majority owners. These fronts give both the program and the legitimate minority owned companies a bad name, and should be aggressively investigated and banned from the program.

Ethnicmajority Business page.