COVID-19 and the Asian American Community

Author:  Vidushee Mishra

The BRB Bottomline

The COVID-19 pandemic brought about economic disaster across the globe. However, one of the most highly-impacted demographics over the past year has been the Asian American community, which has had to battle both the virus and xenophobia.


Lockdowns, decreases in overall consumer spending, and blockages in international trade due to COVID-19 have hurt both small and large businesses throughout the United States. Of the communities affected, however, Asian Americans and their businesses took a significant portion of the hit, with individuals in this demographic seeing higher unemployment and loss of revenue without sufficient aid from the government.

Asian-Owned Businesses

According to McKinsey, pre-pandemic, around two million Asian American–owned small businesses generated over $700 billion in annual GDP and employed around 3.5 million Americans. The majority of these ventures are in industries that continue to be disproportionately impacted by the pandemic, such as food service and retail. Specifically, Asian-owned businesses make up 26% of accommodations and food service, 17% of retail trade, and 11% of education-services businesses. 

Because of restrictions on economic activity throughout the United States, as well as the widespread racism towards Asian Americans which is perpetuated by the stigma that they carry the virus, these businesses are not expected to recover as quickly as others. This has long-term implications for the owners and employees of the aforementioned businesses who tend to be low-income individuals that survive from small-wage jobs in these industries.

Due to a lack of support from the federal and state governments, as well as local community members, Asian American businesses are unlikely to recover as soon as necessary to aid in the revival of entrepreneurship and employment throughout the United States as a whole. Asian American businesses have consistently outperformed the national average on business ownership and employment, with over 25% of Asian-owned businesses employing more than one person, compared to the national average number of 13% of all United States’ businesses. Ensuring that these businesses and workers return to the same levels of functionality that they were previously is key to enabling the entire country’s economy to recover in a timely manner.

Unemployment

Asian Americans have also been hit hard on the issue of unemployment. By analyzing empirical data, it is clear that in previous economic downturns and recessions, such as the 2008 recession, Asian Americans suffer from higher and more extended rates of unemployment than individuals from other racial groups. For example, in the 2008–09 economic crisis, the community’s unemployment rates increased by almost 100%, a pattern that is repeating once again with the COVID-19 pandemic. 

According to Market Watch, in the period between February and June 2020, Asian American unemployment rates “increased by more than 450%,” at a pace that is not comparable to that of individuals in other demographic groups. Even as unemployment numbers decreased in May 2020, Asian American workers’ employment rates still decreased by 0.5%, highlighting the disproportionate amount of job loss the community has experienced.

Not only that, data from a Pew Research Center analysis of government data revealed that in the fourth quarter of 2020, of the Asian American workers that were unemployed, around 50% had not been in the workforce for over six months. This figure in other groups is significantly lower, at around 35% for white, Black, and Hispanic workers. This analysis depicts the fact that Asian workers are having significant difficulties returning to work due to continued racism and discriminatory hiring practices, resulting in long-term consequences for Asian Americans.

Additionally, based on research by Pew Research Center, many of the figures reported about Asian American unemployment are unable to depict the full extent of the crisis the community is facing because a growing number of “job seekers are becoming discouraged” in their prospects of finding a job, causing them to leave the labor market completely. Because these workers make up a significant portion of the American workforce, these trends have extremely detrimental effects on the health and future growth prospects of the economy.

Financial Relief

To make matters worse, many economists predict that Asian Americans and their businesses will face protracted effects from the pandemic largely due to a lack of sufficient government and financial resources and support over the past year.

One of the primary reasons these issues are expected to exist in the future is because 91% of Pacific Islander–owned businesses and 75% of Asian-owned businesses have an extremely limited likelihood of gaining access to the loans provided by the Paycheck Protection Program (PPP). Because minority-owned businesses, especially those with Asian American owners, do not have direct lines of communication or personal relationships with mainstream banks or credit unions, which is one of the main prerequisites to apply for a loan, they are unable to get the help they need from government programs. 

Another problem that the Asian American community faces is a prominent language barrier, which impedes many needy individuals from effectively utilizing and obtaining relief packages from the United States government. Although in theory, this issue should not exist after the issuance of Executive Order 13166, “which aims to provide ‘meaningful access’ to federal agency resources for individuals with limited English proficiency,” there are few to no resources to help individuals in need of translation services. It is important to note that of the four major financial aid services that are sponsored by the Small Business Administration, none of the programs provide resources in Asian languages on their websites or informational documents.  While the PPP offers translations for seven Asian languages on its application forms, there are more than 15 languages that are commonly spoken in Asian households throughout the United States.

To sufficiently address the issues that both Asian American employees and business owners are facing, there needs to be an immediate change in the way that government relief programs are structured to become more inclusive and equitable for all.

Next Steps

By observing the impacts of the COVID-19 pandemic and the responses of the American people and government, it has become clear that more needs to be done to support the Asian community in the United States. In order to ensure that Asians are given proper representation and have a better quality of life, individuals in both the public and private sectors need to band together to help shape and implement more nuanced and culturally aware policies for Asian Americans.

Public agencies, especially those run by the government, must be reformed to promote longer-term equity for Asian Americans. This can be done by shifting the focus of such agencies towards immediate, substantive actions focused on both relief and recovery. Some steps these organizations can take to better serve their constituents is to gather more specific information and data that disaggregates Asian subgroups in order to understand and address various detrimental effects of COVID-19 on different communities, designate a panel to oversee Asian American inclusion in recovery efforts, provide resources and services in Asian languages so that it is accessible to as many underserved people as possible, and take meaningful steps to combat and disengage with anti-Asian rhetoric in public dialogue and statements.

Actors in the private sector can also take steps to better service Asian Americans in their organizations and communities. These efforts should include implementing diversity and inclusion trainings to eliminate implicit biases and microaggressions towards Asian Americans in and around the company, forming resource groups in companies for the use of Asian Americans that include access to mental health services and facilities, expanding access to services within the company to Asian Americans through initiatives such as accessible language translation for company materials, crafting robust strategies to support local Asian-owned businesses, and ensuring that Asian American representation is accounted for throughout the company and its various leadership positions.

Take-Home Points

  • Due to the pandemic, the Asian American community suffered from revenue losses in businesses, high unemployment rates, and a lack of accessible recovery programs 
  • There is a need for united action on both public and private sectors’ parts to enable the Asian American community to continue to succeed in the future

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