Immigrant Entrepreneurship: An Engine for Economic Recovery

With the economy down, many businesses have been declining. Despite this downturn, there has been a rise of immigrants who are providing economic support, leading a strong fight for economic growth. It is no surprise that “foreign-born entrepreneurs have been starting a greater share of new businesses than native-born residents.” Coming to America, immigrants have a certain, specific goal: to be successful. One of the solutions to that, is getting involved in their own business and making a living out of it.  So, small business and entrepreneurship remain the engines of job growth and economic recovery.

Immigrants are 30% more likely to being a business than non-immigrants. That is a shocking high stat because you would expect non-immigrants, who have the resources and are familiar with the American economy to begin a business. That being said, immigrants do have more of a strive and motivation to begin a business despite various factors that come along their path.

Perhaps what’s most surprising is that this growth is not just driven by immigrants with  degrees and high education. In other words, lack of education doesn’t stop these highly motivated immigrants from starting new businesses. That being said, immigrant dominated communities in the city area have shown to have an explosion in new enterprises. Also, stats show that even an increase in job growth among these communities have prevailed. There has been a 34% in Washington Heights and 28% in Jackson Heights.

A question that comes up is what can the nation do to bring more Americans – native-born and immigrant alike – to create their own businesses? That as well as the growth of businesses by immigrants, the overall economy can grow with the growth of entrepreneurs.   Since there is a shift of job growth as well as enterprises, the city must come up with a way to pick itself up from this economic downturn. Whether it is to support these immigrant businesses, or join these businesses and create big companies, action should be taken to solve this economic conflict that immigrants may have an answer to.

The Changing Dynamics of Co-ethnic Entrepreneurship

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.

Immigrant entrepreneurism: the cost and benefits

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.

Young Entrepreneurialism

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.

Immigrants v. Immigrants

America is and always has been a country of immigrants. Every single resident of the United States, besides the Native Americans, is either an immigrant or a descendant of immigrants. This fact makes it hard to understand why new groups of immigrants are typically greeted with anxiety, suspicion, discrimination, and even hate.

The first major wave of immigration came mainly from Europe from approximately 1880 to 1920. This group included many Irish, Polish, Italian, and Eastern European immigrants among many other groups. The established white American population reacted very harshly to this new group of immigrants; they called these immigrants hateful names and prohibited them from working and living in certain areas. This is the climate into which my two Irish great-grandparents arrived in the late 1800s.

My grandmother was the youngest of nine children (all of whom were raised in New York among many other immigrant children), she herself was victim to several instances of discrimination by the WASP population. When she first moved to Elmhurst in 1935 or so, the neighborhood was overwhelmingly white and full of the aforementioned immigrant groups. Within her lifetime, the group of immigrants that her parents came to the U.S. with became more or less incorporated into mainstream society.

She lived in Elmhurst as the second wave of immigrants began to come into the U.S.: Chinese, Hispanics (from many different countries), Indians, Middle Easterners, etc. As the people she grew up with left and passed away and as white Elmhurst began its shift into becoming one of the most diverse neighborhoods in the world, my grandmother experienced anxiety over change. As she grew older, she grew bitter, and as a young child I could not understand what the fuss was about.

This is still a question that I deal with years after my grandmother’s passing. How could a child of immigrants be so scared of other immigrants? She herself was even discriminated against for similar reasons. One answer that I have considered is that it’s an ongoing process of new Americans trying to claim a piece of their own here in the U.S. When the first wave of immigrants came in, the established white population was scared that they’d lose their power, their jobs, or their values. Now we see the ostracized doing the ostracizing.

People naturally fear change and the unknown. Until we stop being so terrified of our fellow Americans, we cannot fully embrace the skills and vitality that they can deliver once they are accepted and incorporated. Those who understand this can tap into the energy and potential of these immigrant groups in ways that can better the society as a whole. For those who do not, it may already be too late for them to see.

Old and New “New Immigrants”

The Political Incorporation of Immigrants, Then and Now by Gary Gerstle and John Mollenkopf mainly discusses about two major waves of “new immigrants”. They discuss significant similarities and differences of these two waves of immigrants. The first wave of 27.6 millions of “new immigrants” was mainly composed of eastern, central, and southern Europeans. They arrived during the recovery time of the Civil War when the economy of the United States had started to develop and stabilize through steam, rail, electricity, and numerous other industries.

After World Ward II and Great Depression, the new “new immigrants” arrived. Unlike the previous wave, this group of people was mainly composed of Asians, Latin Americans, and the Caribbean (fewer Europeans). Since 1965, 20 million immigrants have arrived in the United States and a huge portion of them settled gateway cities like New York, San Francisco, Chicago, and etc. This new generation of immigrants also arrived at the time of economic prosperity and development. Also numerous immigrants with professional skills were present since the standard for the jobs has been raised.

The crucial difference between the old and new “new immigrants” are the problems they face.  The newer immigrants face the wall of education. The requirements for jobs have been getting stricter and stricter. Although the immigrants at the beginning of the 20th century were fairly uneducated, the society did not require for them to have high degree of education. Finally, the later immigrants enter “a more culturally relaxed, multicultural, and perhaps less prejudiced society”. Although there have been anti-immigrant acts, the immigrants weren’t greatly affected by it and eventually, the practice of holding dual-citizenship became popular.

What’s really distinct about the second wave of “new immigrants” is the diversity of race. The older immigrants were able to assimilate to the American society eventually. After a certain point, they were considered “white”. The newer wave will have harder time assimilating into the mainstream society because of the color of their skin.

Gerstle and Mollenkopf 2005, Similarities and Differences between Immigration Waves

Gerstle and Mollenkopf discuss the two great waves of immigration to the United States; namely the great European immigration of the late 19th to early 20th century, and the more recent influx of immigrants from Latin America and Asia from the mid 20th century through the present. They discuss the fact that there is currently a great disparity between studies of the first wave and the second. They propose that to truly understand these movements, lessons from both eras must be applied.

In terms of similarities, in both cases certain “gateway” cities became hubs for immigrants. New groups formed by ethnic similarities appeared in within the older system of division of labor. Immigrants from both eras faced discrimination, from groups that feared their presence but paradoxically exploited them for political and economic reasons.

There were also stark differences, mostly in their respective historical contexts. The first wave of immigration was sustained by the final fruits of the industrial revolution. New technologies developed heavy industry and manufacturing as a major part of the economy. The resulting economic growth created plenty of opportunity for advancement. The second wave on the other hand arrived in a period of economic flux and uncertainty. The lack of education, relative to natives, amongst many of these immigrants makes it difficult for advancement similar to that of the previous wave.

The Political Incorporation of Immigrants, Then and Now

The readings The Political Incorporation of Immigrants, Then and Now  by Gary Gerstle and John Mollenkopf focuses on the similarities and difference between the two immigrant waves that have arrived in the United States during the last two centuries. The reading makes sure to highlight the struggles and impact of the arrival of immigrants during the years 1881 to 1930 and at the beginning of the 21st century. According to the article, between the years of 1881 to 1920 about 27.6 million immigrants arrived in America, most of them from eastern, central and southern Europe, boosting the population up by 10.4%. After the liberalization of immigrant laws in 1965, about 20 million immigrants arrived from Latin America, Carribean and Asia. The majority of these immigrants settled in “gateway cities” such as New York, Los Angeles, Miami and San Francisco. Because of the declining birth rates among the native born residents, this wave of new immigrants began to make up more than 30% of the population.

There are some apparent differences between the wave of immigrants that arrived in the late 1800’s and the wave if immigrants that arrived later on in the 1900’s. For example, the wave of immigrants that arrived in the 1880’s arrived at a time that the United States was experiencing economic growth because of the rapid industrialized caused by the factories railroads, automobiles, and air travel This wave of immigrants was also more poorly educated than the current wave of immigrants. Furthermore, racial division was the central divider among the immigrants of that era. By contrast, the recent wave of immigrants have arrived at a time in which the level of discrimination has greatly diminished due to the blacks struggle to gain equality. Gerstle and Mollenkopf state that, “…today’s immigrants enter a more culturally relaxed, multicultural and perhaps less prejudiced society. In which the blacks struggle for justice has ended many aspects of instituitionalized discrimination agains non whites”( Gerstle and Mollenkopf 8) .

However, there are some similarities between the two waves of immigrants. Both waves settled in certain cities, giving themselves a distinct ethnic character. The journies of both groups reflected both the opportunities and resources provided by their destination of choice. Furthermore,  they both arrived at a time of economic transformation and wealth inequality and faced religious and racial discrimination.

What shocked me the most about this reading was in the beginning where the author stated that there has not been much research concerning the similarities and differences between the two waves of immigrants. While I was in high school, I took the Advanced Placement United States History course. I recognized many of the material that i learned included in this specific reading. What I most remember from the course was the repetitiveness of patterns that occur after immigrants settle in a new area. These patterns, such as immigrants settling in a place because of economic change and then facing discrimination from the the already established residents, have repeated themselves throughout history. So when the article stated that there has not been much research into the comparison of the two waves of immigrants, and instead researches have relied on stereotypes, it interested me. Shouldn’t we focus on the negative aspects of these repeating patterns so maybe we can look ahead into the future and prevent discrimination and conflicts from occurring? Also, another thing this reading reminded me of was the Community Board meeting I attended last night. What stuck out the most about the readings was when this man stood up to speak to the committee. He briefly stated his background, explaining that he was an Ecuadorian immigrant from the Andes. He stated that he wished to join the committee to reduce the hate crime in his area between Italians and Ecuadorians. When I heard that, I was astounded. It made me feel like a lot of the material that I have learned in this class, even it concerned immigrants from decades ago, is still prevalent today. I believe that we should continue to study these repeating patterns indepthly so we can prevent and fight such kinds of discrimination that has been going on for so long.

Political Incorporation

In The Political Incorporation of Immigrant, Then and Now, Gary Gerstle and John Mollenkopf talk about the development of immigrant participation in politics and the two waves of immigrants that came to the United States of America.  The first wave, which lasted from the 1880s to the 1930s, consisted of mainly Europeans.  Most immigrants came from countries of Eastern Europe, like Italy, Germany, and Ireland.  The second wave consisted of Latinos, Asians and Caribbeans during the 1900s to present day.  With the new wave of immigrants coming to the United States came the inevitable rise in immigrants in blue collar jobs.  With the lack of skill and knowledge of how the job market worked in America, immigrants were a great source of cheap labor for manufacturers and other low-skilled jobs.  Both waves of immigrants also settled in city areas with other immigrants, like New York City.  Since immigrants seemed to gravitate towards other cultures similar to theirs, the authors point out how the first wave of European immigrants became more assimilated into American culture, or “white” culture.  As time passed by, Europeans became accepted as part of the American culture.   Because the earlier wave of immigrants related more to “white”culture, it makes sense that immigrant participation in politics has declined.  The newer wave of immigrants do not feel as assimilated as the earlier wave, so they are not as inclined to participate in political activities.  Of course, there are the few immigrants who are interested in politics and making themselves heard.  The issues of immigrants are being made more and more known, even though participation is lower than it should be.

Political Incorporation

The Political Incorporation of Immigrants, Then and Now by Gary Gerstle and John Mollenkopf discuss two different time periods in U.S. history that immigration was especially prevalent. The first of which dates from 1880-1930. This first wave was made up of Europeans (England, Ireland, German, etc.) who migrated to the United States. Upon arriving these immigrants immediately took to blue collared jobs and created their lives around these jobs. The second wave was made up of Latin Americans and other “non whites” (Latino, Asians, Caribbean). Few of these new immigrants started in blue collared jobs. We still see second wave immigration to this day with a large number of Asian and Latino immigrants.

The authors point out some of the differences between the first wave and the second wave of immigrants. One of these differences is the first wave had a greater opportunity to slowly assimilate with the other whites around them. For the second wave, it is increasingly more difficult to assimilate into “white” culture because with such a high concentration of diversity, it is clear that immigrants tend to stick with people of similar backgrounds.

As time has passed, immigrants are taking less and less of a role in politics. The first wave of immigrants seemed to take a more active approach to politics in voicing their opinions and willing to fight. The second wave of immigrants typically takes a backseat in politics. I know from experience that my parents, who are both immigrants, often question whether there is any point in voting. They constantly speak about how “this is a white man’s world” and despite arguing with them, they have already made up their minds. To them, the country will run with or without them so they believe there is no real need for them to voice their opinions because they believe that as a minority immigrant, there opinions will not be heard.