When most people hear “Jim Crow,” they think of segregated water fountains and “Whites Only” signs. Those signs came down. But the economic structures that kept Black and brown families out of wealth-building industries? Many of those are still standing — they just got rebranded.

In Virginia’s construction industry, one of the clearest examples of this legacy is occupational licensing. On its surface, contractor licensing sounds neutral — a way to protect consumers and ensure quality work. But look at who these requirements actually burden, and the picture changes fast.

The numbers tell the story

Minority-owned businesses make up over a third of all U.S. businesses — yet they receive a drastically disproportionate share of contracting dollars. According to a White House Council of Economic Advisers report, these gaps have not meaningfully improved since the 1990s. In regions with higher measured racial bias, the disparities are even wider.

That’s not a gap — that’s a wall. And discrimination isn’t a relic. It’s a current event.

What Virginia’s licensing system actually demands

To legally do construction work in Virginia — even a single job over $1,000 — you must be licensed through the Department of Professional and Occupational Regulation (DPOR). Here’s what that really means for someone trying to start a small business from the ground up:

• 01
  Net worth requirements that start the race miles behind A Class A contractor license requires $45,000 in net worth. Class B requires $15,000. For families historically denied home ownership, business loans, and wealth-building for generations, this isn’t a bar — it’s a wall.
• 02
  Stacked exams, fees, and bonds Applicants must complete an 8-hour pre-license course, pass separate business and trade exams, pay application fees of $210–$360 depending on class, and in some municipalities post a surety bond on top of that.
• 03
  Experience verification that punishes informal workers Applicants must document 2–5 years of trade experience. But many minority tradespeople spent their careers working informally — due to historic exclusion from unions and apprenticeships. Proving that experience on paper becomes its own barrier.
• 04
  Criminal history disclosure with a disparate impact Any felony conviction must be disclosed — often with documentation. This can disqualify skilled workers with records, disproportionately excluding Black applicants who were over-policed and over-prosecuted by the very system this one now mirrors.
• 05
  No reciprocity with neighboring states Virginia has no mutual licensing agreements with D.C. or Maryland, trapping small minority-owned firms in narrow markets while larger, better-funded companies operate regionally with ease.

That quote isn’t from a radical pamphlet. It’s from published economic scholarship. The connection is well-documented — these licensing laws proliferated after formal segregation ended, filling the void left by explicit racial exclusion with race-neutral rules that had the same effect.

The wealth connection is direct

Construction and contracting are not just jobs — they’re one of the primary ways working-class families build generational wealth. A licensed contractor can grow a business, hire employees from their community, win government contracts, and pass something real down to the next generation.

An unlicensed one faces fines of up to $500 per day and criminal misdemeanor charges.

For Black and Latino families in Virginia — communities that were systematically locked out of homeownership through redlining, excluded from FHA loans, and barred from trade unions for most of the 20th century — the licensing wall in construction is one more inherited obstacle stacked on top of all the others. These effects didn’t fade when the laws changed. They compounded.

What fair reform looks like

This is not a call to eliminate contractor licensing. Consumer protection matters. But we can demand the system be honest about who it burdens — and fix it:

• Subsidized licensing pathways for small, minority-owned contractors — covering exam fees, coursework, and application costs so upfront money is never the reason a skilled person can’t get licensed.

• Alternative experience verification that recognizes informal trade work, community-taught skills, and non-union apprenticeships as legitimate — because they are.

• Criminal record reform that evaluates whether a conviction is actually relevant to the trade, rather than blanket disclosure requirements that disproportionately disqualify Black applicants.

• Stronger Disadvantaged Business Enterprise (DBE) goals on state and local contracts — research directly ties these to reduced racial gaps in who gets contracting dollars.