Pew report: Asian and Asian American entrepreneurs highly vulnerable to COVID-induced economy

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Last month, NYC’s biggest Chinese restaurant, Jing Fong, closed temporarily after 40 years in business, a victim of the coronavirus economic slide, the New York Post reports.

Asian and Asian American entrepreneurs are likely to be hit hard by the economic downturn caused by the measures being used to battle the coronavirus pandemic. 

A new analysis by the Pew Research Center finds that more than four-in-ten US businesses with paid employees operate in higher-risk industries likely to be affected by the COVID-19 outbreak. 

Female business owners in particular have somewhat more exposure in higher-risk industries.

Additionally, Asian entrepreneurs have a relatively strong presence in accommodation and food services, retail trade and other services, elevating their financial risk from the COVID-19 outbreak.

The Pew report found that the economic risk to business owners varies by the demographic group to which they belong. Men, white or Asian entrepreneurs, people ages 55 and older and college graduates are more likely to be business owners compared with their shares in the workforce overall. At the same time, women, Asian and foreign-born entrepreneurs have a greater presence in higher-risk industries than in the economy overall.

The study focused on small businesses, those with 11 employees on average.

While 80% of the businessses surveyed were white owned, Asian owners have a relatively strong presence in accommodation and food services (25%), retail trade (16%) and other services (15%), elevating their financial risk from the COVID-19 outbreak, according to Pew.

Immigrants are a major driver of the American entrepreneurial economy. More than 40% of Fortune 500 companies were founded by immigrants or their children, over 50% of American billion-dollar “unicorn” startups have at least one immigrant founder, and immigrants are nearly twice as likely as the native-born to start a new company.

Hispanic and Asian immigrant business owners face significant risk due to the current  economic downturn. They accounted for 51% of all Hispanic-owned businesses and 74% of Asian-owned businesses in 2016, shares similar to the percentages of Hispanic and Asian workers who are immigrants.

The most visible evidence of the impact of the current recession are the empty streets of  usually bustling Chinatowns and the number of shuttered Chinese-owned restaurants.

Wellington Chen, executive director of Manhattan’s Chinatown Partnership Local Development Corporation, told CNN that only 40 of New York City’s 270 Chinese restaurants remain open.

Even before businesses were forced to change their normal day-to-day operations, Chinese businesses were struggling. As early as February, Chinatowns across the country began reporting a significant drop in business, according to The Financial Times. 

Kevin Chan, owner of the Golden Gate Fortune Cookie Company in San Francisco’s Chinatown, told The Guardian that he estimated he had seen an 80 percent drop in foot traffic through his store. By mid-March several Chinese restaurants in Flushing New York had reported an estimated 50 percent drop in business, according to Business Insider.

ASAM NEWS contributed to this report.