Korean immigrants to the United States since the late 1960s have achieved economic independence through self-employment despite language barriers and cultural differences. They have leveraged their ethnic networks and education to run successful businesses and expand their influence in American society.
Korean immigration to the United States began in earnest in the late 1960s. Today, Korean Americans work in a wide range of professions and are a highly influential immigrant community in the United States. Although the early immigrants faced many challenges due to language barriers and cultural differences, they nevertheless worked tirelessly to adapt to American society. In particular, their attempts to achieve economic independence took many forms, which soon became a distinctive occupational characteristic of the Korean immigrant community.
One important occupational characteristic of the Korean immigrant community is the unusually high rate of small business ownership compared to other ethnic groups. According to one statistic, the rate of self-employment among Korean Americans is 70% higher than the average for all Americans. This is not just a statistic, but an important indicator of their economic independence and social adaptation. This phenomenon is driven by their desire to establish themselves in their new environment and provide better opportunities for their children.
There are many reasons for the relatively high prevalence of self-employment in Korean immigrant communities. One common explanation is limited English proficiency, but some research shows that first-generation Korean immigrant self-employed workers have higher levels of English proficiency and education than Korean wage earners in the private sector. Nevertheless, the English language skills of the self-employed do not necessarily translate to mainstream employment, and although a high proportion are college graduates, their education and credentials in Korea are rarely recognized in the process of getting the jobs they want. This situation has led immigrants to opt for independent economic activities that can best utilize their education and experience.
The jobs that are readily available to these people who do not have access to the preferred jobs of the mainstream society are jobs that avoid direct competition with people from the mainstream society. These are sectors that mainstream people have avoided or left because they can no longer expect to profit from them. Typical examples include businesses that cater to ethnic minority consumers or labor-intensive businesses. This type of self-employment characterizes the business life of Korean Americans. Immigrants saw opportunities in these niches and utilized their own resources and networks to develop their businesses. This has played an important role in helping Korean Americans maintain economic stability while also maintaining their cultural identity.
It is worth noting that Korean immigrants who were forced to choose self-employment had both ethnic and personal resources available to them to prepare and run their businesses. First, ethnic resources included the fact that many Korean immigrants lived in specific geographic areas and were organized around religious groups, which allowed them to exchange information about their businesses. Second, they had access to low-wage family labor because their family ties were intact. Religious groups, in particular, were more than just places of worship; they served as important venues for information exchange and mutual support. Communities formed in churches and temples provided networks where immigrants could share their experiences and collaborate based on trust.
Personal resources included education and access to capital. The high level of education they received in South Korea, although not recognized by mainstream society, provided them with the basic skills to run a business. Their social background in South Korea also allowed them to have some personal savings and easy access to capital. In addition, some immigrants have built successful business models based on their experiences in South Korea, exploring new opportunities in the U.S. market. They have also invested heavily in their children’s education, helping to ensure that the next generation has access to better economic opportunities.
One of the theories that explains the phenomenon of Korean immigrants focusing on small, individual businesses as they integrate into American society is the “middle man theory”. An important characteristic of the middleman group is that they act as intermediaries within the economic structure between producers and consumers, employers and employees, owners and tenants, and upper and lower classes. In the early years of immigrant communities, many Korean immigrants operated small shops in the poorer neighborhoods of large cities. Korean immigrant-owned businesses had the opportunity to serve as “middlemen” in neighborhoods populated primarily by low-income Latinos and African Americans. However, they also faced the challenge of being at odds with mainstream goods suppliers, landlords, and government agencies on the one hand, and consumers on the other.
To cope with the conflicts with the mainstream society and to fulfill their business needs, Korean immigrants strengthened their ethnic cohesion. They established Korean retailers’ organizations to collectively deal with problems, and they practiced vertical integration, which combines distribution processes under one management system to reduce costs and strengthen purchasing bargaining power. By concentrating in one area, Korean retailers with similar businesses were able to pool their orders with powerful Korean wholesalers and negotiate with suppliers for better prices. They also received support from managers in the vertical chain, such as accounts payable and start-up loans. This system of cooperation provided an economic safety net for early immigrants and gave them the opportunity to build a successful business model based on mutual trust.
However, the negative effects of vertical integration could not be ignored. When too many Korean retailers participated in these networks, market saturation occurred by concentrating on a small number of product markets, and other ethnicities who were not part of these networks were excluded from the benefits of vertical integration simply because of their ethnicity. Vertical integration is a characteristic of the Korean immigrant community that distinguishes it from other ethnic groups. While it has allowed Korean self-employed individuals to continue to accumulate capital and experience, it has not fundamentally solved the problem of long hours of labor in small businesses. Nonetheless, Korean immigrants have continued to improve their situation, and with a challenging spirit, they have managed to establish themselves in American society. Generation after generation, they have achieved greater economic success and social recognition, and are now a significant ethnic minority in the United States.
