My Korean immigrant neighbors have been in the United States longer than I’ve been alive. I grew up having them as both my neighbors and as my neighborhood grocers. When I saw the topic of this seminar’s discussion, I decided to talk with them about their experience of starting their own business in Elmhurst.

Dae Young Kim’s Beyond Co-ethnic Solidarity: Mexican and Ecuadorean Employment in Korean-Owned Businesses in New York City explains the relationship of co-ethnic employer and co-ethnic employees and how gradually, the employment by independent self-employed Korean businesses started to change.  Kim explains that since the 1970s, there has been an increase in self-employment rate. According to the reading, the 1990 US Census data showed the self-employment rate for Koreans to be estimated at 35 percent. Koreans were forced to turn to self-employment mainly because of language barrier. To find workers and employers who were trustworthy, the Korean immigrants had to turn to other Koreans for help.

I could relate my dad and the company he works for to this reading. Similarly, my dad and his brother in law are also engaged in co-ethnic employment. My uncle already settled in the United States and established his own ATM business (self-employment) and because he was looking for co-ethnic labor, my dad was able to get the job pretty easily.

This ethnic solidarity had both its ups and downs. At first, co-ethnic employers and employees were both benefitting from this trade. The employers found cheap labor that was willing to over-work. However, soon, these employees established their own businesses that soon turned into competition. For Koreans, working for these independent Korean companies was just a temporary measure. They also soon wanted to establish their own store after the “business training” from other companies.

Since the 1980s, with more independent businesses and less Korean immigrants, co-ethnic labor was scarce along with the increase in cost. This resulted in search for another type of labor force for the Korean employers. According to one of the interviews in the reading, Holiday Cleaners’ owner mentions, “Mexicans were employed because it became a big burden to employ Koreans”. Korean employees expected special treatment just because they were Koreans while the Mexicans were willing to work for smaller amount of money. Because the employers could hire two or three decent Mexican workers for the price of a Korean worker, they couldn’t resist but hire them for certain types of jobs. Kim also predicts that Mexican and Ecuadorean employment is going to continue to increase.

In Jonathan Bowles  Immigrant Entrepreneurism: An Engine for Economic Recovery, he discusses the impact that immigrants have had on the US businesses. Bowles argues that immigrants (who are 30% more likely to start up a new business as compared to non-immigrants) are the key to boosting the New York City economy. RIght now, these immigrant run businesses have more capability than they are reaching. Many different factors hinder these businesses to reach the amount of income they can truly reach. In such a diverse area such as New York City, if a business is run in a language other than English, they attract people of their own race but they are not able to reach many other nationalities. Bowles argues that the government should work towards encouraging these small immigrant businesses to thrive so that the city in itself can generate more income.

These immigrant owned businesses can easily be seen in a drive down Hillside Avenue in Queens, New York. There are Indian food markets, restaurants and beauty salons on every corner. Everywhere you look there are businesses made up of people who have recently come to this country and with the little money they had, have created a flourishing business. Many times, people tend to avoid “American” grocery stores in order to support their fellow Asians in their business.

Jonathan Bowles’ article, entitled “Immigrant Entrepreneurship: An Engine for Economic Recovery,” gives a good introduction as to both the pros and cons regarding immigrant entrepreneurship. Bowles’ article could arguably be a bit biased since it was published so soon after the economic downturn that took place in 2008, but regardless, many points are still valid. He notes that immigrant businesses over the past ten to twenty years have become “a powerful engine of economic growth,” immigrants being 30% more likely to start their own business. Immigrant-founded businesses have superseded the stereotypical food establishments or bodegas and have delved into health care or Silicon Valley-esque technology firms. This is evidence that immigrants are very much capable of “making it” in today’s economy.

However, the struggle lies in the lack of a support system. Being recent immigrants, these business owners often know little of American business practices, have a credit history, or know the right sources to go to for financial advice, and these factors are what lead to the failure of the business. Bowles makes an extremely valid point that the success stories needed little support in their start-ups, so if perhaps, the bureaucracy could dedicate just some attention to the needs of these recent immigrants, an economy that claims to be built off small businesses can be restored to its former glory.

Bearing in mind Bowles’ analysis, Chapter 4 of Min’s book, “Korean Immigrants’ Economic Segregation,” describes a textbook example of the economic advantages of an immigrant enclave. Min breaks down the businesses of Koreatown, documenting importers and wholesalers, professional firms, as well as more everyday businesses such as food markets and nail salons. He articulates that Koreans have the highest rate of starting a business amongst other minorities, often times because that is their intention in coming to this country and they have properly prepared themselves via language classes and vocational school. A notable observation of Min’s notes the Korean business owners’ tendency to cater towards African-American communities. Though they are by no means more concentrated in these neighborhoods, their clientele often is. Min argues that perhaps in gearing business practices towards this group, Korean businesses aren’t actually catering to African-American customers, but rather to lower-income ones.

This can then be directly linked to Kim’s study “Beyond co-ethnic solidarity: Mexican and Ecuadorian employment in Korean-owned businesses in New York City.” Kim outlines how Korean businesses are increasingly abandoning the practice of co-ethnic employment in favor of hiring lower-wage seeking Latinos. Of course there are multiple factors for this shift: a decrease in Korean immigration, the high benefit costs of Korean employees, etc., but it could be argued that the Korean business practiced geared towards lower-income customers could thereby be extended to employees, and thus such a shift occurs.

Immigrants play a huge role in creating businesses in the United States. In a study done nationwide, in November 2008, it was found that immigrants are nearly 30 percent more likely to start a business than non-immigrants (Bowles 2009). A study done by Jonathan Bowles reveals that immigrants drove all the growth in New York City’s self-employed population between 1990 and 2000. Interestingly enough, the number of foreign-born self-employed individuals totaled 64,001 while the number of native-born self-employed individuals totaled 15,657. Flushing and Sunset Park had a big jump in the increase of new businesses, 55% and 47% respectively, and the first thing that comes to find when you think about those two neighborhoods is the outstanding Asian population in those two neighborhoods.

Asians have generally played an important role, the past few decades, in the creation of businesses in the United States, primarily in California and New York. More Specifically, Korean immigrants have been known to be self-employed primarily in Los Angeles, and New York City. Korean immigrants, in the 1990 census, actually had the highest self-employment rate among all minority and immigrant groups in Los Angeles, exceeding even the native-born Whites of Russian ancestry (Min 1996). The question to ask to understand this phenomenon is: “Why has starting a business become ‘a cultural fashion’ among Koreans?” And the answer is based upon two key factors: culture and disadvantage. The culture theory (Kim 1999) examines the rationale of some immigrants to bring some of their home country into their new society. While the disadvantage theory analyzes the disadvantages Korean immigrants face such as: poor English, licensing requirements, American credentials, discrimination, etc. (Kim 1999).

In an earlier reading about Urban Enclaves, one of the authors discussed how many Latinos were the labor force driving the Asian restaurants and businesses, working in the kitchens and such in neighborhoods such as Flushing. This week’s reading went further in depth about immigrant labor. Two of the articles discussed the growing trend of Latino immigrants working in Korean immigrants’ businesses.

The trend is due to a number of factors. It starts out with the Korean immigrants. Korean immigrants arrive in America, and they encounter many struggles; one of the examples Kim gave was that their credentials earned in Korea don’t necessarily transfer over. Hence, they turn to other Koreans who have set up their own businesses. The problem, though, is that these Koreans only stay to learn the basic information. As Kim explains, most leave after mere months of working there. That led to the drive by Korean business owners to hire Latinos.  Kim also discusses the trend which is that Koreans will not hire blacks as much as they hire Latinos. The main reason that Kim gives is that there are negative ideas about them, and that Latinos are attractive workers because they are often undocumented and the wages they earn are higher when they are exchanged for the currency at home.

In Bowles’s article, Bowles describes a multitude of problems surrounding immigrant entrepreneurship. For example, many immigrants experience “unfamiliarity with how business is done…lack of awareness about local regulations, limited financial literacy…little to no credit history” along with language problems. As seen in Kim’s article, some of the Latino immigrants reported that they couldn’t talk to fellow employees that weren’t Hispanic because they couldn’t speak Korean. The chef, the owner, everyone spoke Korean.

In Min’s article, Min describes the nature of Korean immigration to the United States: the numbers have gradually decreased over time as South Korea has become politically and economically stable. Koreans are very different from other Asian immigrants, however, as they are educated and many of the immigrants have been middle-class Christians. Unlike the Koreans, many of the immigrants that have emigrated have been from rural, working-class or peasant class backgrounds, and unlike their fellow Asian, Chines and Japanese immigrants are largely not Christians. Interestingly, Min uses the term ‘ghetto’ to describe the new Seoul located in Flushing. Why does she describe it as a ghetto, though, as it should and would be more accurately called an enclave? Min also stated that she searched for the new Korean community in New York by searching up the last name “Kim” which she claims is the most popular last name-why did she not choose to search up other   popular last names? I found it a questionable method. Based on a series of tables in the article, Koreans have opened a large number of grocery stores as well as nail salons (which is evident), yet business was not something that many of these Koreans chose to pursue when they came to the U.S.

In Immigrant Entrepreneurism: an Engine for Economic Recovery, Jonathan Bowles makes the argument that immigrant entrepreneurs are the solution New York City’s economic downturn. As a result of the recent immigration influx, there are more immigrant-run businesses appearing throughout the city. Bowles suggests that the city consider immigrant entrepreneurs as a solution to revitalizing New York City’s economy. He explains how there is not enough support for these businesses and since immigrants naturally face language barriers and other difficulties when establishing themselves in a new country, it is difficult for their businesses to reach full potential. He encourages the city to implement new laws and policies that would help immigrants expand their businesses. Particularly in New York City it is harder to startup new businesses as a result of competition and higher living standards and real estate prices.

Bowles’ argument that immigrant businesses will help revitalize the economy is something that should be considered. In Min’s article, Korean Communities: New York and Los Angeles, he mentions that Korean immigrants only start their own businesses because they believe they cannot find jobs in the general labor market and that native-born Korean Americans don’t even want to consider starting up their own businesses. Yet, as Bowles mentions, new enterprises created in immigrant neighborhoods surpassed business created city-wide. Despite the unwillingness of these immigrants to be self-employed and the lack of support from the city, immigrant enterprises are doing surprisingly well. Imagine what would happen if these immigrants did receive the support they need for their businesses. However one thing that should be considered is whether or not the expansion of these businesses is really the best the option. As both Min and Kims’ articles mention, the immigrant self-employment usually occurs in enclaves or coethnic neighborhoods where their businesses caters to the needs of immigrants of shared ethnicity. Would their services and goods that immigrants need and like, be able to sell as well in areas where there may be no immigrants or people of similar ethnicities? Would prejudice or just plain lack of interest prevent immigrant businesses from profiting if they expanded? I agree that immigrant entrepreneurship may help New York City’s economy and that with support, they may thrive, but it may depend on the type of support they receive.

In “Beyond Co-ethnic Solidarity: Mexican and Ecuadorean Employment in Korean-owned businesses in New York City”, the author, Dae Young Kim, examines the changing dynamics in the co-ethnic nature of Korean owned businesses and applies these findings to critique the traditional scholarly approach to immigrant entrepreneurship

In the past, scholars have put forward the Ethnic Enclave Thesis, asserting that in ethnic enclaves co-ethnic employees and employers form a mutually beneficial relationship. In other words, both sides benefit from an economic relationship. Employees provide employers with a large and cost-efficient labor force while employers provide training and the chance for promotion or independent entrepreneurship.

How did this co-ethnic economic model come to be? With the drastic increase in the reate of immigration in the nineteen sixties came rising discrimination. Immigrants succeeded in overcoming this discrimination and building new economies and communities for themselves by collaborating and cooperating with their co-ethnic community to help build businesses and become economically self sufficient.

In the past, scholarly literature has almost exclusively painted a positive picture of co-ethnic economic partnership and as a result has failed to properly note the internal conflicts and views within ethnic communities. These conflicts, perceptions, and the resulting economic shift have contradicted the fully positive model of co-ethnic entrepreneurship and economic solidarity. To address these issues, Kim uses the events behind the changing dynamics within Korean-owned business to illustrate the costs and following downfall of co-ethnic economic solidarity.

In short, what happened in the Korean immigrant economic community was as follows: In the beginning, Korean businesses followed the Ethnic Enclave Thesis perfectly. They hired many of their co-ethnics who provided them with abundant, cheap, and reliable labor. In return they provided job training and also provided an established business infrastructure and community from which new immigrant could eventually mold their own businesses. And in this lies the problem. Eventually, the population that would have been employed cheaply by business owners became business owners themselves or advanced themselves economically using other paths.  As Korean business owners saw their own labor pool dry up they were forced to turn to other more reliable and cost-efficient sources, namely, recent Latino immigrants.

In his article, Immigrant Entrepreneurism: An Engine for Economic Recovery, Bowles places special emphasis on the immigrant owned businesses in New York City. Previously, we discussed that immigrants flock to areas where there are high concentrations of other immigrants just like them. Bowles mentions that in The Center’s 2007 study, neighborhoods with a high concentration of immigrants have experienced a significant increase in small immigrant owned businesses. For example, Flushing, a thriving immigrant enclave, has had a 55% increase between 1994 and 2004 (followed by neighborhoods like sunset park, Jackson Heights, Washington Heights etc.). Compared to the foreign born entrepreneurs in New York City, natives are less likely to open up their own businesses. These immigrant businesses not only help the economy by creating jobs, but they also stimulate growth in various sectors of the economy (such as food manufacturing, healthcare etc.)

Although small businesses are an integral part of the country’s economy, immigrant owners have to face various obstacles that prevent them from expanding their small businesses. As Bowles points out, these small businesses not only lack support from city policymakers but their owners also usually are less aware of rules and regulations when it comes to running a business in the United States. Language barriers also hinder these owners from expanding into the American market. Therefore, it helps them to cluster in and cater to their own ethnic community (for example, Flushing). Also, immigrant owners have to deal with expensive real estate and often; these owners are struggling to keep up with the rising rent. For example, whenever I take a trip to Jackson Heights, I always notice how some businesses are completely replaced by other new businesses. Many factors (discussed above) contribute to the foreclosure of these old businesses. Although I see many businesses shutting down, it is remarkable to see that there is always another immigrant owner willing to utilize that space. Because of this large growth in the small business sector, Bowles encourages the local government and agencies to support these businesses so that they can expand and make a significant contribution to the growth of the city’s economy.

The main point of Jonathan Bowles’ piece Immigrant Entrepreneurism: An Engine for Economic Recovery is that immigrant entrepreneurs are the ones who can, and most likely will, help kick start the city’s economic recovery. Using statistics, historical background, and neighborhood studies, Bowles develops this idea, showing how immigrants have successfully contributed through starting up their own businesses, which have positively impacted their local communities and the general economy. As a result of these new businesses, a variety of jobs in different sectors have popped up and employment has consequently been on the rise. In heavily immigrant communities there has been a tremendous growth in businesses, while in the city the increase has been nominal. Bowles goes on to explain how and why immigrants, who are 30 percent more likely than non-immigrants to start businesses, have not achieved their entrepreneurial potential in New York. Because of limited financial literacy, little credit history, and language barriers, they struggle to expand their businesses, let alone keep them stay afloat. There are ways to help them, Bowles suggests, such as developing a new framework for small businesses in immigrant communities and ensuring that city economic development officials help these immigrants expand their businesses outside of the five boroughs.

While I found this article compelling, I found a major flaw in it. Since the Great Recession in 2007, our economy has been very vulnerable and still needs a great deal of help to return back to its prime in the mid 2000’s. I believe that entrepreneurs would help boost our economy, but not in the immigrant sector specifically, as Bowles points out. We should not limit the focus on immigrant entrepreneurialism, but rather we should broaden the idea to young entrepreneurs in general. Since it is difficult to find a job nowadays, it would behoove both young people and the economy if people fresh out of college were to be creative and start their own businesses: they would not be unemployed but rather self employed, and consequently there would have more employed people contributing to the growth of the economy. The important point is not that immigrants should be the ones who are the entrepreneurs. Rather, if younger people are the ones who are starting new companies, there would be fresh ideas and the market would develop at a faster pace. I am not saying immigrants should not contribute, but instead perhaps the focus should be on young immigrants. Since the market has a chance to start anew after its unfortunate crash in 2007, we must find a way to ensure that the youngest people are entrepreneurs so that there will be a fresh vibrancy in the market that will last for a long time.