Supreme Court Strikes Small Business Benefits for Hawaiians


Mililani B Trask: Trustee Hawaiʻi Island

In a recent decision, a federal court judge struck down a provision of the Small Business Administration (SBA) program that had provided minority businesses, including Black, Asian, Latino and Hawaiian businesses, with billions in federal funds.

Known as the 8(a) program, it allowed minority applicants to qualify for federal small business money if they were in the “disadvantaged” category. Following the July 2023 ruling, Hawaiian small businesses no longer (automatically) qualify and are now required to submit a written narrative detailing how past racism and bias hindered their business success and that the “disadvantage” was “chronic and substantial.” If they are unable to prove this, they will not receive federal SBA funding for their small businesses.

This standard cannot be met by small business start-ups. They have no record of “chronic and substantial” past instances of racism against their businesses because they are just starting out.

This standard ignores the way racism really works. As many Indigenous peoples know, racism is often subtle – there’s nothing in writing or on video. It just “happens” – like when property owners don’t rent to “colored” people, or the non-white applicant doesn’t get the job.

These changes will have a devastating impact on Indigenous minority small businesses. Data indicates that of approximately 4,800 businesses who participate in the 8(a) program, nearly 4,000 were certified under the presumption of “social disadvantage.” In 2020, 8(a) firms received $34 billion in government contracts. Many of these awardees were Hawaiian businesses.

These changes in the program criteria are not being widely publicized or covered by mainstream media. It’s important that all Hawaiian beneficiary groups are aware of these changes – whether or not they are applying for federal funding for projects – because they portend the expanding political attacks on affirmative action programs and their funding mechanisms.

This follows in the footsteps of the landmark Harvard decision that ruled that their college admissions policy was “unconstitutional” because it relied on the presumption of “social disadvantage.”

What can we do?

I have received requests from some community folks asking if these court decisions will impact their 8(a) funding.

The answer is a big YES.

For many years we have gathered and documented the facts and data relating to the political, social and employment statistics of our people, at home and on the U.S. continent. The Hawaiian health data verifies our poor health profile. Statistics on unemployment, homelessness and incarceration also demonstrate the inequality and racism that Hawaiians and other Pacific Islanders have historically faced in America.

These cases, and the changing racial climate, indicate that the political pendulum is swinging in the opposite direction. Hawaiians and all peoples of color and culture need to be aware that the hard-fought battles for racial equality of Martin Luther King Jr. and other advocates are under threat.

As Hawaiians, we need to be mindful of our distinct political relationship with the State of Hawaiʻi and the U.S.A. We are not “Native Americans.” Hawaiʻi is the only state in which the Indigenous peoples own the land, submerged lands, minerals and resources – including natural renewable energy resources. We need to defend these precious resources and ensure they are used wisely and preserved for our future generations.