Korean Small Businesses in New York City
compiled by Ruby Danta
The Korean American Dream: Ideology and Small Business in Queens, New York by Kyeyoung Park)

The concentration of Koreans in small businesses has generated both interest and misconceptions about their operation and financing. This discussion seeks to give some background on the development of these businesses.

Koreans began to immigrate to the United States in large numbers after the Immigration Act of 1965 removed quotas based on national origin (for more information, see Asian/American Center RE-series/Koreans in New York). Like other immigrants who settled in the U.S., Koreans work in and own small businesses such as green grocers, convenience stores, and garment factories. The decision to work in these operations was due to several factors--many immigrants who were professionals and white- collar workers in Korea found their education was of little use once they arrived in the U.S. Lack of English skills made it difficult to obtain jobs comparable to those they held in Korea. With such limitations, they often worked for other Koreans in businesses where they learned about its operation and were able to save some of their earnings. Once they obtained enough capital and experience, they pursued their own business.

Koreans also chose to work in small businesses because, just as they were arriving in New York City, there was a decline in manufacturing jobs, and some service jobs like domestic work), which historically had been held by Asian Americans on the West Coast, already were filled by other ethnic groups. Also at this time, many European immigrant small business owners were retiring and selling their stores. The Koreans could provide the abundant supply of labor, moderate amounts of capital, and simple knowledge of English required to operate these stores.

In New York City, Koreans predominate in operations such as green grocers, dry cleaners, and fish markets. The also run delicatessens, bakeries, restaurants, candy stores, gift and stationery shops, discount stores, shoe repair shops, moving firms, and nail salons.

Most Korean businesses are small and operated by a husband, wife and other relatives who usually are not paid employees. The owners often work more than twelve hours daily, six or seven days a week. Following are brief descriptions of a sampling of Korean small businesses.

Korean green grocers number about 1,400 in New York City. Since many small businesses depend on Koreans as well as non-Koreans for wholesale suppliers, workers, and customers, owners develop different strategies to attract customers in their neighborhoods. For instance, a Manhattan store often will include a self-service salad bar with hot dishes to satisfy customers looking for quick meals. Manhattan green grocers often employ a manager to take care of the store, which usually is open 24 hours. A manager and other workers are employed during the day, and a manager (who doubles as a cashier) and another worker are expected to take care of business at night. These green grocers hire more workers than the stores in Queens, where an owner often goes to market and manages the store himself.

There are about 600 Korean fish markets in New York City. Koreans entered this business soon after the rise in popularity of green grocers. During the 1980s, the fish markets changed along with the usual selection of fresh fish, many markets began selling fried shrimp, clams, fish and chips, and sometimes sushi and sashimi. Usually the owner is the cashier and two or more workers clean and slice fish. This experience sometimes serves as the training ground for late employment as a sushi chef in Japanese or Korean restaurants.

In the early years of the most recent wave of Korean immigration (post-1965), the dry cleaning business was not popular among Koreans. It required more capital than a green grocer or fish market. Today there is any estimated 2,000 dry cleaners run by Koreans in New York City. This operation is considered a "clean" business because it is not difficult to run and is profitable. Moreover, one does not have to work long hours or on Sundays.

Since the mid-1980s, nail salons run by Koreans have been popular. There are several reasons for this boom--unlike barbers and hair dressers, New York State does not require manicurists to be licensed. The initial capital for this business is relatively low, about $20,000. It takes about six months for Korean women to become skilled manicurists, after time many open their own businesses. 1989 figures state there are 1,000 nail salons run by Koreans.

According to an organizer for the ILGWU (International Ladies Garment Workers Union), there are over 400 garment factories run by Koreans in the New York City metropolitan area. In recent years, many have relocated from Manhattan to Queens in search of lower rents. Koreans who amassed enough savings would buy garment factories, often using their wives' previous work experience in Chinese factories for business guidance. Now Latin Americans and Chinese work alongside Koreans in the Korean-owned garment factories in Elmhurst and Corona, Queens. Today, about 7,000 Koreans work in the garment industry.

Financing Korean Small Businesses: The increase in the number of Korean small businesses, and the expansion from labor-intensive green grocers, fish markets, or garment factories, to more capital-intensive dry cleaners, gift shops, and delicatessens have contributed to the mistaken portrayal of Koreans as "Moonies" who are able to purchase businesses because they are financed by the Reverend Sun Myung Moon. Other common misconceptions are that the American or Korean government systematically provides the capital for Korean small businesses, or that the majority of Koreans receive their start-up capital through bank loans.

In fact, until the mid-1970s, new Korean immigrants depended on their relatives for free room and board and employment. They would work long hours and save whatever they could. After several years a frugal couple could purchase its own business.

As the number of Koreans increased, it became more common to receive loans (often without interest) from relatives or friends, and to combine this with personal savings to start a business. In 1978, the Korean government lifted the $1,000 limit that Korean immigrants could bring to the U.S., and in 1979, it was raised to $3,000. Later, in the 1980s, the Korean immigrant family could bring up to $100,000, and by 1990, the limit was raised to $200,000.

Korean immigrants bring varying amounts of money ranging from $150 to $200,000, depending on their means. Many sell all their property before coming to the United States, enabling them to finance a business.

Since the early 1980s, the growth of the Korean community has made it possible for Koreans to consider organizing rotating credit associations, or kye. Kye has a long history in Korea, where it is used as a means of meeting any financial need.

A kye consists of a group who pool their funds on a regular basis. By taking turns, each member is entitled to the entire pot until all members have had their chance. The organizer receives the first pot, which gives him or her the maximum amount of credit among kye members. The kye usually involves substantial amounts of money. Among Korean immigrants the kye is central to business success, and many join several rotating credit clubs. Koreans in New York are familiar with kye, and use it for both social and business purposes. It should be emphasized, however, that before the limit was lifted in 1978 on the amount of capital that could be brought out of Korea, few people could think of joining rotating credit clubs, let alone opening a business immediately after arriving to the US.

In conclusion, Koreans get capital to establish their businesses from personal savings earned while working here, loans from relatives or friends, Kye and money brought from Korea. It is through these small businesses that Koreans are finding their place in New York City and educating their children so they can succeed and fulfill their families' "American dream."

Ruby Danta is an anthropologist and the Translation Program Coordinator at the Asian/American Center.

Kyeyoung Park is a Visiting Assistant Professor of anthropology at the University of California, Los Angeles.

April, 1991