Why So Many US Koreans Run Dry Cleaners While Arabs Are Grocers

Posted October 15th, 2015 at 9:10 am (UTC-4)

(File) Korean immigrant-owned Custom Dry Cleaners with store co-owner Chung Soo (R) and her daughter-in-law Choi Soo (C) behind the counter, with local customer Victory Hucks (L) in Washington, D.C. (Reuters)

(File) Korean immigrant-owned Custom Dry Cleaners with store co-owner Chung Soo (R) and her daughter-in-law Choi Soo (C) behind the counter, with local customer Victory Hucks (L) in Washington, D.C. (Reuters)

In the United States, Koreans are 34 times more likely than other immigrant groups to run dry cleaners, while Gujarati-speaking Indians are 108 times more likely to manage motels.

Economists William Kerr, of Harvard Business School, and Martin Mandroff, of the Swedish Competition Authority, studied the relationship between ethnicity, occupational choice, and entrepreneurship. They found that ethnic groups in the United States tend to concentrate in certain businesses and that these small, socially-isolated groups attain considerable financial success through this type of concentrated entrepreneurship.

FILE -- Rae Alzaweny, owner of the Iraq Market grocery store, sorts produce in Dearborn, Michigan. (AP Photo)

FILE — Rae Alzaweny, owner of the Iraq Market grocery store, sorts produce in Dearborn, Michigan. (AP Photo)

According to Kerr and Mandroff, Yemenis are 75 times more likely to own grocery stores than other immigrants, while Greeks tend to concentrate in the restaurant sector, and Middle Eastern immigrants are more likely to own grocery and liquor stores.

The researchers say people decide what industry to enter based on their interactions.

The tendency to cluster around certain industries often results because market interactions — such as with corporate America or in higher education — can prove more challenging for certain members of ethnic groups.

Consequently, they rely more on social interactions — with friends, family or people within their ethnic group — to learn new skills and find jobs.

This tendency to own their own business is more apparent among some groups. For example, 45 percent of adult Korean males are self-employed. That’s three times higher than the 15 percent self-employed rate of the general adult male immigrant population.

As business owners, these immigrant groups have to rely on their own judgment and they tend to learn from each other.

“When socializing during family gatherings and religious/cultural functions, entrepreneurs mentor each other and exchange industry knowledge and professional advice,” the authors wrote. “The more an entrepreneur socializes with other entrepreneurs, the more knowledge is exchanged. Social interaction and production are therefore complementary in the entrepreneurial sector and entrepreneurial productivity increases with the number of friends and family members in that sector.”

"From Social Networks, Ethnicity and Entrepreneurship" by William R. Kerr and Martin Mandorff

“From Social Networks, Ethnicity and Entrepreneurship” by William R. Kerr and Martin Mandorff

10 responses to “Why So Many US Koreans Run Dry Cleaners While Arabs Are Grocers”

  1. Daniel Raftery says:

    Cambodians tend toward Donut shops in California. They are very well skilled in the mixing / baking and frying process of pastries.

  2. mary pham says:

    Strange! The 4th largest Asian immigrant group in America: Vietnamese completely, missed while some other reports indicating they own some 75% of all nail salons, nationwide… Is there an explanation?

    • Mari says:

      The French colonized the Vietnamese and during that time french manicure was introduced to the Vietnamese. They came to the States in the
      80s mostly as boat people and they saw a need and fulfilled it since they are good at it.

  3. Jason says:

    Gee wouldn’t it be nice if Americans actually owned businesses in America.

    • Paul Nguyen says:

      This is my view, seen with my own eyes and hear with my own ears. Myself is an Immigrant. MOST American (not the top 1% and not the “carefree=not wanting to move up the economical ladder”), this includes 2nd gen “Immigrants”, who are pretty much born with a “silver spoon in their mouth” compare to A LOT of 1st gen “Immigrants”. There are many social benefits here that do not exist in other parts of the world such as welfare, subsidized housing, food stamp, free education (including YouTube, many online materials, libraries, vocational schools), etc and etc. In other words, anyone can easily get self-educated. Anyone can flip hamburgers, washing dishes, eat left over food and can easily get educated with a high degree from universities. It is certainly not a high standard of living when receiving these benefits but one does not need to worry about food, clothing, nor a place to live. It is not unlimited but plenty of time to get educated to compete with the top 1%. The environment does not induce nor produce “hard working” people for an “average Joe”. Hunger is nearly in non-existence here, one can always dumpster dive restaurant and supermarket for “good food”. One can always cheaply shop at places where they sells “expired” or passed “use by” date products. There is no such thing in the poor area of the poor (3rd world) countries. In such areas, people would yearn for better “life” or situation. Meaning better education, therefore, better job, climbing out of the “hell hole” is always on the poor people’s mind. In these places, people would have a very hard time getting out of where they are at, mostly because of the political system. These people would be like a compressed spring. They just stay compressed in a “bad political” system and would spring in a free environment like here in the US. “Average Joe” who is born here in the US does not feel any pressure, only the “odd duckling” from this group would feel the pressure and would do something about it to rise up economically. I hope I have not offended anyone with my humble comment. I do deeply apologize if I have offended someone. To me, this subject is complicated and I cannot express it in this short comment.

    • kiven says:

      gee. why not get off your ••• and start working on it.
      take class. save money do your reseach. invest time and resouce on yourself.
      stop feeling sorry for yourself. if other come half way around the world to do this. you at least should just try.

    • Joan says:

      Gee, Jason, how do you know they aren’t Americans? You do know the concept known as “naturalization” and that many American citizens are produced other than being born on American soil, right?

  4. Sandi says:

    Jason, unless your real name is “Tonto,” your people were also immigrants who likely stuck together and passed a trade or business around the family for a couple of generations; maybe it was farming, depending upon the time of their immigration, and maybe they subsequently sold the farm and went to work for Henry Ford. Looking at the list, I don’t notice that any ethnic group is identified as owning hardware stores, banks, barber shops, jewelry stores, etc. I guess that suggests that there are businesses actually owned by “Americans.” Americans are people who call the U.S. home, and hopefully join in honoring our heritage as a melting pot. Very few can make the claim that their ancestors didn’t melt into the national stew at some point in previous generations.

  5. sam says:

    Romanians: Elder care homes

  6. PermReader says:

    Prophet Muhammed was the merchant.

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