Asian American communities fall behind in pandemic recovery

Small-business owners, in particular, face their worst employment situation on record

Owner Andy Ton looks out the front door of Andy’s Barber Shop in Vienna, Va., on Sept. 3 as he takes a moment in between customers. (Caroline Brehman/CQ Roll Call)
Owner Andy Ton looks out the front door of Andy’s Barber Shop in Vienna, Va., on Sept. 3 as he takes a moment in between customers. (Caroline Brehman/CQ Roll Call)
Posted September 10, 2020 at 5:30am

Andy Ton has enjoyed having a busy barbershop since founding the Vienna, Virginia, business 18 years ago. Fathers often came with sons, and families chatted while waiting their turn.

Now, because of the coronavirus pandemic, haircuts happen by appointment only, with no one else allowed in. They also generate only half the previous revenue since the shop reopened after being remodeled to safely accommodate customers.

“At the moment, we don’t see a lot of people coming back, because they’re afraid of the virus, of corona,” Ton said.

Access to the Paycheck Protection Program and other Small Business Administration loans helped him through the lockdown earlier this year. An immigrant from Vietnam, Ton is among the lucky ones: Federal data shows that Asian American-owned businesses, as well as those owned by immigrants, have been hit harder amid the pandemic than those owned by their white counterparts.

The jobless rate among Asian Americans as a whole spiked to record levels this year. At 10.7 percent in August, it was still higher than at the height of the Great Recession more than a decade ago. Asian Americans now face the highest unemployment they’ve seen on record and a decline in working business owners twice that of whites.

Asian American communities are disproportionately represented in industries that have been slow to recover from the pandemic, affected by a lack of language support and other outreach from the federal government, advocates say.

Ton gives James Henry a haircut in his shop. (Caroline Brehman/CQ Roll Call)

President Donald Trump’s rhetoric around the virus, which he repeatedly has called “the Chinese virus” or has described using a racist slur, has not helped, said Jo-Ann Yoo, executive director of the Asian American Federation. Many Asian American business owners reported revenue first dropping in January, when coronavirus cases were first confirmed in the United States and hate crimes against Chinese and Chinese Americans started increasing.

Yoo fears the current crisis may only get worse if the economic recovery doesn’t pick up. She argued Asian Americans have had to grapple with the “model minority” stereotype for too long, and that has masked a need for help.

“This is going to be economic devastation beyond what we think. I just feel like, I don’t want to say it, but I feel like, ‘Oh my god, here comes the Depression,’” Yoo said.

Rep. Judy Chu, D-Calif., who chairs the Congressional Asian Pacific American Caucus, pointed out that Asian American-owned businesses in her district and nationwide saw revenue decline before the pandemic lockdowns hit in March.

“We were the canary in the coal mine,” she said.

“I think there will be economic devastation for the AAPI [Asian American and Pacific Islander] community unless there is relief,” Chu said. “We need unemployment to be continued and the cash rebate to be done once again because those dollars we know will go immediately to the businesses in the community.”

Ton cleans a chair after seeing a customer. (Caroline Brehman/CQ Roll Call)

Hard-hit industries

A large number of Asian Americans also work in industries particularly hard hit by the pandemic, according to 2019 data by the Bureau of Labor Statistics.

While they made up about 6.5 percent of the labor force overall, they make up 17 percent of workers in dry cleaning, 46 percent of nail salon workers, and large parts of other service industry job sectors that have been slow to recover amid the pandemic.

Yoo said that may have a major impact on the ability of immigrant families to build wealth. Half of New York City’s Korean American-owned dry cleaning businesses may close this year, according to the Asian American Federation, one of many domino effects from the current economic crisis in Asian American communities.

While the economy as a whole lost 13 percent of jobs and employment has recovered 5 percentage points since April, the “other services” sector — a catch-all term for industries as widely varied as parking attendants, religious services and personal care, which has the second-highest proportion of Asian Americans — lost 21 percent of its jobs in April. It has since recovered about 14 percentage points.

The sector with the largest percentage of Asian Americans, business and professional services, lost 10 percent of its jobs in April and has since recovered a little more than 2 percentage points.

Ton wipes down a mirror in between customers. (Caroline Brehman/CQ Roll Call)

Ton, who also owns a nail salon, said both businesses have seen half their revenue since reopening in May. While he’s busy with appointment after appointment, safety precautions have resulted in cutting the hours of staff, who now work about three days a week.

“We’ve been here a long time and people know us, but now they are coming once every two or three months,” Ton said. “We’ve been getting better every month, getting increasing business, but I don’t think we get back to normal for a couple years.”

As the federal government rolled out the PPP program, it ran into a major problem in reaching immigrant communities — language barriers.

Amy Chomthakham owns a consulting firm in the Atlanta area and works with the Laotian community. She said the SBA has provided support for the Hmong language, which is spoken by only one ethnic group in Laos.

That meant immigrant business owners who spoke Laotian or other languages had to either push for additional translations — something they may not be comfortable with — or help each other.

“We, Laotians, are pretty humble and not involved in politics in general. But everything starts and everything ends in politics, whether we like it or not. It takes place within the political arena, which our people are not comfortable with,” Chomthakham said.

Asian Americans have also reported increased discrimination or fear they may be attacked. A July report from the Pew Research Center found that about 40 percent of Asian Americans said people have acted uncomfortable around them since the start of the outbreak. It found 31 percent reported being subjected to slurs or jokes, and 26 percent feared they may be attacked based on their race, more than double the national average.

University of California economics professor Robert Fairlie said his research has found that Asian American-owned businesses continue to lag behind the national recovery average through June. About a quarter of those businesses closed during the height of coronavirus restrictions in April, according to Census Bureau data.

That same data shows that Asian American-owned businesses have continued to fall behind white-owned ones through June, according to Fairlie’s research. Overall, Asian American businesses have declined by 10 percent since February, compared to about 5 percent for white-owned businesses.

About 7,000 of the more than 600,000 businesses receiving PPP loans worth $150,000 or more reported they are owned by Asian-Americans, according to administration data. However, the agency noted that about 75 percent of businesses did not report race or ethnicity.

The SBA eventually added support for 17 languages, but Chu noted that came after a monthlong wait, which was too long for many businesses.

“The Asian American community has so many small businesses, and small businesses has been the key to the American dream since Asian immigrants started coming to our shores,” she said. “To have this situation has been so devastating.”