Chinatown Small Business and the Disparate Impacts of COVID-19 on Asian America
Updated: Jan 6
Chinatowns in the United States have served as a pinnacle of social life and civic participation for Chinese immigrants since the 1850s, when economic prospects abroad and political upheaval at home quickly brought tens of thousands of Chinese to America. Faced with the cruel realities of racial animosity and very limited economic opportunity, Chinatowns became the only avenue through which America’s Chinese population could fully foster a sense of community and culture. This foundation set the stage for the evolution of small businesses in what was to become Asian America, and the subsequent permeation of social and economic hardships all the way up to the current COVID-19 crisis.
Excluded from employment opportunities and labor unions by means of legal discrimination as well as physical mob violence, Chinese immigrants of the mid-1800s were forced to establish communal and familial small businesses in order to make a living for both themselves and their families abroad. Given White Americans’ virulent intolerance of economic competition with ethnic minorities, this dire need for entrepreneurship continued to grow as Chinese communities spread throughout the West and across the nation. By the year 1920, 48% of all Chinese in California worked in small business. 19th-century activist Wong Chin Foo reminds us all that arduous service businesses like laundries and restaurants were not optimal choices for the then mostly-male immigrant population, but rather the only way members of Chinatown communities could “make money as surely and quickly” as possible (Lee, 2015, pp. 75-76).
Despite widespread anti-Chinese sentiment exacerbated by a worsening American economy, Chinatowns nationwide filled a much-needed niche within both the Chinese communities themselves as well as the American nation as a whole. The only racial group ever explicitly barred from both entry into the country and naturalized citizenship from 1882 until 1943, Chinese migrants depended on each other to establish their own labor unions, fraternal associations, and other means of mutual aid. In addition to sustaining themselves, Chinese immigrants and businesses were also absolutely critical in developing the early American economy. After comprising a stark majority of the labor force that built the very first transcontinental railroad, Chinese immigrants established countless businesses that catered to a largely non-Chinese clientele. In fact, laundries fulfilled a dire need at a time when scarce cleaning services were expensive enough to incentivize many Californians to ship their clothes to Hawaii for cleaning at a lower cost, despite having to wait months for them to be returned (Lee, 2015, pp. 76). Family-run restaurants and chop suey houses also served to feed countless masses of White workers and laborers.
Navigating the murky waters between the divisive Black and White racial binary, Chinese and other Asian Americans’ hardships were rendered largely invisible in public discourse during the mid-20th century Cold War era. Neoconservative leaders and policymakers, desperate to refute accusations of racism abroad and civil unrest at home, held up Asian Americans’ successes as proof of American democracy and “race-neutrality,” effectively conflating Chinese and other Asian Americans within the same racialized group for the first time. The fabrication of the “model minority” myth and its propagation during the peak of the Civil Rights Movement not only functioned to blame Black Americans for their continued hardships in contrast, but also effectively masked the economic and political struggles of nearly all Asian American ethnic groups, especially today.
Despite the widespread and erroneous belief that Asian Americans are the most fiscally successful and therefore the least impoverished racial group in the U.S., disaggregated data from the turn of the 21st century tells a different tale. Since the Great Recession of 2008, AAPI Data reported a 60% increase in poverty within Asian American communities, over double the national average of 27%, making Asian Americans the fastest-growing population in poverty since. However, these communities only received 1.4% of NYC social service funding between 2002 and 2014. Additionally, the conflation of all Asian ethnic groups further masks the disproportionate economic hardships of Southeast Asian refugee populations including Cambodian, Hmong and Laotian Americans, whose median household incomes were drastically lower than the national average between 2008-2012 (Shih et. al., 2019, pp. 417). The propagation of the model minority myth within public discourse, which posits all Asian Americans as a single, self-sufficient and problem-free racial other, is critically detrimental to Asian ethnic communities in effectively denying them access to crucial federal funding, services, resources and opportunities.
Unchallenged racial stereotypes have ultimately led to an unprecedented struggle within Asian American communities during the COVID-19 pandemic. Asian-owned small businesses, especially restaurants, are struggling immensely at the intersection of unemployment, lack of government assistance, social animosity and racial violence. As early as April 2020, hardly a month into the United States’ Coronavirus lockdown, the National Republican Senatorial Committee distributed a memo to GOP candidates advising on strategically and “aggressively attacking China” on all related concerns (Isenstadt, 2020). President Trump’s virulent scapegoating of the crisis onto the “Wuhan virus” in public discourse has led to a tremendous spike in Asian Americans’ experiences of hostility, harassment and even violence in public spaces, particularly public transit (Vazquez, 2020). Xenophobic stigma, in addition to the exponential loss of revenue and the systematic lack of federal assistance, has been nothing short of detrimental to Asian-run small businesses.
Increasingly overrepresented in small business, particularly restaurant ownership (U.S. Census Bureau, 2016), as well as the primary victims of related xenophobic discrimination, Asian Americans have suffered tremendously in the wake of COVID-19 in ways unique from other racialized groups in the U.S. A recent report conducted by researchers from several UCLA-affiliated organizations, including the UCLA Center for Neighborhood Knowledge and the UCLA Asian American Studies Center, unveils the disparate impacts of COVID-19 on Asian American employment and labor, particularly as seen in New York and California.
Based on the hundreds of thousands of Asian-run businesses shut down by the public health crisis between February and April this year, the authors of the study reported a national decline of Asian American small business as high as 28%, compared with a White decline of 17%. Additionally, by May 2020, researchers found that the unemployment rate of Asian Americans during the pandemic had reached 15%, compared with 12% for Whites. By mid-April, Asian Americans accounted for 14% of the unemployment claims filed in New York State, despite comprising only 9% of the state’s workforce. The economic recession has also had a particularly detrimental impact on disadvantaged Asian Americans. According to UCLA researchers, 83% of California’s Asian American labor force with a high-school education filed unemployment claims, compared to only “37% for the rest of the California labor force with the same level of education” (De La Cruz-Viesca, 2020).
Anecdotally, a study conducted by the Asian American Advocacy Fund based on personal interviews with Asian American small business owners reported a decline in revenue as high as 75% for some. Additionally, 75% of interviewees reported applying for at least one government loan; most reported that the Paycheck Protection Program (PPP), vital to keeping workers employed, only covered one or two months of costs (Asian American Advocacy Fund, 2020).
Currently, the wreckage of COVID-19 is an unmitigated disaster for Asian-run businesses, particularly low-income Asian American small businesses in the service sector. Now, more than ever, Asian America is suffering the consequences of systemic neglect at the hands of the American federal and state governments. Levels of economic downfall and anti-Asian sentiment, unprecedented since the 1800s, urgently call on American policy to hold true to the declaration of equal protection for all under the law. Regardless of the nature of intent, the basing of need on racialization over reality violates the foundations of the American Creed and serves to systemically divest essential resources from those most in need. Now, more than ever, the democracy desired by the American people cannot be achieved until economic, social and political equality is administered to all, both in practice and in policy.
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About the Author:
Alyssa Boyle is a recent graduate of Binghamton University with a B.A. in Linguistics and Korean Studies. An aspiring young professional in journalism, she strives to ensure the dissemination of credible information on all things current events, politics, wellness and more via original and informed content. In addition to Start:Empowerment, she has also worked on several other editorial teams to produce, publish, and optimize valuable and verified content, including Weill Cornell Medicine and The Muse. In her free time, she enjoys writing stand-up comedy and political cartoons. Say hi on LinkedIn or Instagram @_alyssa_boyle_