&#91OUTLOOK&#93For immigrants, persistence pays

There is a European myth about a long-lost relative who emigrated to America to find his fortune. As the myth goes, the “American uncle” always struck it rich, and would one day return to set everything right. The difference is that in the case of Korea, the myth -- or at least the first part of it -- is real.
Koreans who began arriving in the United States 100 years ago initially were recruited as strikebreakers on the pineapple plantations of Hawaii. This immigration was short-lived -- it was ended in 1905 under Japanese pressure, but the Koreans, unlike many of their immigrant contemporaries from other countries, did not return home due to the deteriorating political situation. Stuck in Hawaii, the mostly urban Koreans established businesses, and by 1970 had the highest per capita income and lowest unemployment rate of any ethnic group in Hawaii.
More than 2,000 of these original immigrants transited to the U.S. mainland, settling on the West Coast. Several hundred settled in agricultural communities in central California and established some prosperous agricultural businesses there, which were important sources of finance for the Korean nationalists in exile. Indeed, the first president of the Republic of Korea, Syngman Rhee, along with other nationalist leaders such as An Chang-ho and Pak Yong-man, emerged from this milieu.
A second wave of emigration occurred in the 1950s, but Korean emigration to the United States really took off in 1965 with the relaxation of the U.S. national immigration quotas. Although many of these third-wave immigrants were white-collar workers in Korea, they found that a lack of English language proficiency hampered the full exploitation of their Korean qualifications within the American economy. Many shifted careers and started small businesses or purchased existing businesses of retiring non-Korean businessmen, thus coming to dominate certain types of businesses (such as groceries and dry cleaning) in American cities such as New York, Los Angeles and Chicago. In this regard they are part of a long American tradition of successive waves of immigrant businessmen, following in the wake of earlier immigrant entrepreneurs.
The number of Koreans in the United States has grown dramatically since 1960, when the U.S. Census Bureau first began reporting Koreans as a distinct ethnic group. The number of “foreign-born” Koreans (i.e. immigrants) has increased from roughly 11,000 in 1960, to more than 1 million in 2000, or about 0.4 percent of the total U.S. population. According to data from the U.S. Immigration and Naturalization Service, the peak year for Korean immigration to the United States was 1987 when nearly 36,000 Korean immigrants entered the United States. Since then the number of Korean immigrants has steadily fallen to less than half as many, as improvements in the economic, political, and social situation in Korea has made emigration less attractive. In this respect, the pattern of Korean emigration to the United States has followed the same trajectory of other “sending” countries such as those in Western Europe.
More than one-third of the Korean immigrants are in California, where they make up about 1 percent of the population. The next most popular destination for them is New York, followed by New Jersey, Illinois and Washington. In percentage terms, Korean immigrants are most prominent in Hawaii, where they make up nearly 2 percent of the state’s population.
The census data indicate that Koreans are close to the U.S. population median for household income ($50,000 for Koreans versus $51,200 for all Americans) and per capita income ($20,000 for Koreans versus $26,000 for all Americans), and that the share of the Korean population having attained a college degree or better (49.2 percent) is almost twice the national average (26.8 percent). Second-generation Korean-Americans appear to be upwardly mobile, with median incomes of $70,000, nearly 40 percent higher than the national average, and a rate of college degree attainment of 54.7 percent, more than twice the national average.
Korean immigrants exhibit a higher rate of entrepreneurship than the average American, with Korean-Americans in 2000 having a “business density” (i.e. persons per business) of 7.9, compared to 13.5 for the general population. This is to say that the Korean-American community has been creating businesses at a rate 70 percent higher than the rest of the population. Moreover, immigrant entrepreneurial activity of this sort is also likely to be associated with unusually high savings rates and capital accumulation. Data from the 1980 and 1990 censuses reveal that Korean immigrants had savings and wealth accumulation rates around twice as high as the overall U.S. population. A statistical analysis in a book recently published by the Institute for International Economics, titled “The Korean Diaspora in the World Economy,” indicates that if the Korean immigrant share of the U.S. population doubled, this would be associated with a 0.1-0.2-percentage-point increase in the growth rate of U.S. per capita income. Instead of the long-lost rich American uncle coming home to make everything right, maybe it’s the rich Korean-American uncle come to fix things in America!

* The writer is a senior fellow at the Institute for International Economics and author of “Avoiding the Apocalypse: The Future of the Two Koreas,” which won the 2001 Ohira Masayoshi Memorial Prize.

by Marcus Noland