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Asian American entrepreneurs: Most likely to hire other workers

Oct 22, 2015

Entrepreneurs are often touted as job creation engines. But a report published on Thursday from the Pew Research Center says that, in a comparison of racial and ethnic groups, Asian American business owners are most likely to hire other workers.

Nearly one-third of Asian Americans who are self-employed—which Pew defines as people who work for profit or fees in their own business—had paid employees in 2014. By comparison, 25% of self-employed whites, 18% of Hispanics, and 15% of black Americans hired at least one other worker.

As a result, Asians account for a disproportionately high share of job creation. They made up 6% of the self-employed workforce but account for 7% of all hiring by the self-employed. Meanwhile, Hispanic Americans make up 13% of all self-employed workers, but their 2.1 million paid employees accounted for just 7% of all hiring by the self-employed. Likewise, black Americans made up 6% of the self-employed workforce, but generate just 2% of hiring. The 10 million self-employed white Americans—far and away the the largest of all racial and ethnic groups—generated 83% of all hiring by the self-employed, providing jobs to some 24 million workers.

Pew Research Center Self Employed job creation by race

Paul Ong, a professor of urban planning, social welfare, and Asian American studies at UCLA, says it's important to remember that most self-employed Asians don't have employees working for them. But to explain why the share of those who do—31%—is higher than other groups, he points to two primary factors. "A lot has to do with the nature of their businesses," he says. Many Asian entrepreneurs go into the retail business and light manufacturing—highly labor intensive industries. To run a "reasonable business," he says, "you need workers."

The second factor is self-employed Asians' access to what Ong calls a "sub labor market." Because some immigrants in the Asian community lack education, language skills, and social capital, working in Asian-owned businesses—often for low wages—is their only reliable source of employment.

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