Ethnic Enclaves

The ethnic enclave is a subeconomy that offers protected access to labor and markets, informal sources of credit, and business information for immigrant businesses and workers. Ethnic enclaves offer entrepreneurial opportunities and earnings for immigrant owners and managers through the exploitation of immigrant labor in poor working conditions. They are phenomena that advance our understanding of the changing experience of immigration and social mobility in America. The enclaves of Asian and Latino immigrants emerging since the 1960s are com parable to the enclaves of Jewish and Italian immigrants at the turn of the twentieth century. They present a route for economic and social mobility by promoting positive returns  on human capital for immigrants in the labor market. During the decades of immigrant restriction, ethnic enclaves were shunned in the US as economic and spatial barriers to the successful assimilation and upward mobility of immigrants to American life. Since the 1960s, however, ethnic enclaves have been increasingly seen as agents for economic and social mobility. Ethnic enclaves are proliferating in both the cities and suburbs of contemporary immigration gateway cities such as New York, Miami, Houston, and Los Angeles. They constitute and convey the process of globalization as nodes of trade and transaction in flows of ethnic labor, capital, commodities, and cultural products across trading regions. There are costs as well as benefits that come with the insertion of ethnic enclaves into the complex social dynamics of contemporary global cities.

Path-breaking research in the early 1980s on the concept of the enclave economy initially focused on the contrast between the Cuban enclave and the black economy of Miami (Wilson & Portes 1980; Wilson & Martin 1982). This  research methodology utilized input–output multiplier matrices. The Cuban owned firms of the Miami area were found to comprise a dynamic subeconomy of construction, manufacturing, retail and wholesale trade, and banking firms that recirculated and multiplied income through interindustry and consumption linkages. The economy of black neighborhoods, by contrast, was impoverished and capital scarce, with income constantly leaking out of the community through branch manufacturing plants and chain stores owned by whites and large corporations. The enclave economy was conceptualized as an alternate subeconomy from the segmented mainstream economy, which was split into an upper tier of jobs with good mobility ladders, and a lower tier of dead end jobs in which minorities and the economic underclass predominated. Investment capital was commonly raised in ethnic enclaves through devices such as kinship networks  and  rotating  credit  associations. These ethnic enclaves offered a protected sector for immigrants newly arrived without English language skills, good education, or official papers.

The  study of the enclave economy was extended to a number of Latin American and Asian enclaves and comparisons made with earlier European immigrants (Portes & Manning 1986). In her research on New York’s Chinese enclave, Min Zhou (1992) drew a distinction between an ‘‘export sector’’ that derived earnings from outside the enclave, and a ‘‘protected sector’’ that derived from earnings from sales to co ethnics. The dynamism of the ethnic enclave economy is based in large part upon the multiplier effect, by which export earnings are spent and recirculated among co ethnic enterprises throughout the remainder of the protected sector. For example, garment manufacturing can be viewed as an export sector that multiplies enclave income through forward and backward linkages with co ethnic suppliers and buyers, as well as consumption linkages with other co ethnic enterprises such as restaurants and markets. On the other hand, ethnic restaurants and other retail businesses comprise characteristics of both an export and protected sector. The concept of an ‘‘export sector’’ is clearer in theory than in practice, comment John Logan et al. (1994). They concluded that ethnic enclave economies are best typified by co ethnicity of owners and workers, spatial concentration, and sectoral specialization. Evidence of sectoral specialization can be found in measuring overconcentration of ethnic enterprises or labor in particular industries as compared with the general population. A greater degree of sectoral specialization indicates a more successful ethnic enclave.

A segment of the research utilized a ‘‘returns on human capital’’ research methodology, which determined that positive returns accrued to employers at the expense of workers. This research found that ethnic enterprises undertook a kind of ethnic self exploitation by which immigrant employers profited from their ability to exploit co ethnic workers in a ‘‘sweatshop’’ sector under poor working conditions and poor labor rights. There was some debate regarding whether the enclave should be defined by place of work, place of residence, or industry sector (Sanders & Nee 1987). ‘‘Sweatshop’’ is a label for an enterprise that exploits workers with poor wages and benefits, bad working conditions, and low occupational security. Some researchers found evidence of significant gender differences in labor market outcomes. Positive returns for men were to some degree derived from negative returns to women as subordinate workers (Zhou & Logan 1989). The surplus value generated through ethnic solidarity in the enclave economy was derived effectively through worker exploitation by socioeconomic class and gender. The disparity in short run benefits is followed by positive aggregate benefits in the long run.

Contemporary Asian and Latin American immigrants  have  succeeded  the  European immigrants of the turn of the twentieth century, in the urban industrial districts and residential neighborhoods of many US  cities. Their appearance has helped revive many commercial, warehousing, and manufacturing districts that had been declining since the 1950s, as a result of suburbanization, the out movement of industry, and the ‘‘runaway shop’’ to the developing world. The new ethnic enclaves are not just an illustration of immigrant succession, they are an outgrowth of neoliberal economic and free trade policies since the 1960s, which promoted the mobility of labor and capital between the US and its trading partners. The  Hart Cellar Immigration Act of 1965 removed restrictive quotas and restrictions on immigrant flows, as well as introducing banking deregulation to encourage capital outflow and inflow, and policies oriented to encouraging the import and export of goods (Sassen 1988). The new gateways of globalization include cities such as New York, Washington, DC, Miami, Atlanta, Houston, Los Angeles, and San Francisco. The growth of ethnic enclaves in the Frostbelt as well as the Sunbelt leads us to a revision of our understanding of post industrial urban transition, through which the dynamism of globalization and immigration can be seen as superseding the decline associated with deindustrialization.

Ethnic enclaves are not just a factor in the insertion of immigrants into the American economy. They are nodes in the flow of immigrant labor, capital, and culture between the US and the emerging economies and trading regions of Asia, Latin America, and the Caribbean. The sweatshops of the immigrant garment industry are connected with trends of global sourcing in manufacturing. The banks of the ethnic enclave are crucial institutions in mediating transnational capital flows, whether they are inflows such as investments for overseas investors or outflows such as remittances for immigrant labor. New Asian and Latino immigrants have succeeded the earlier generation of Italian and Jewish immigrants in the traditional central city ‘‘urban village,’’ but many enclaves are appearing in suburban locations, with ethnic signage proliferating in strip malls and commercial arterials. The ethnic suburb, or ‘‘ethnoburb,’’ has become a common feature of life in some American cities. The ethnoburb is a symbol not only of immigrant success, but also of intergroup conflict in the global city.

The insertion of ethnic enclaves into the social and economic dynamics of the postindustrial cities has been in some areas a vociferously conflicted and contested process. In some cases such as the Cuban enclave of Miami and the Chinese enclave of Monterey Park, California, in the 1980s, the proliferation of ethnic businesses and signage led to the growth of nativist and xenophobic reactionary local social movements, and support for English only language ordinances. In Monterey Park, the link between the ethnic enclave and rapid commercial development also sparked a growth control movement among local homeowners and politicians (Horton et al. 1987; Li 1999).

Some immigrant entrepreneurs focus on certain occupational niches as economic and social ‘‘middleman minority’’ between dominant white groups and poor minorities. Chinese, Korean, and Indian immigrants commonly operate small business groceries, liquor stores, and motels. They fulfill a function undesired by white elites. They act as a social buffer between the dominant and oppressed groups of a society, and in situations of crisis may bear the brunt of underclass anger, as seen in the black/Korean violence that  followed the Rodney King disturbances of 1992 in Los Angeles (Min 1996).

For most of US history until the 1960s, ethnic identity and customs were generally suppressed in cities through projects of urban settlement and social reform work that sought to assimilate immigrants to the English language and American values. Chicago was the seminal expression of the modern industrial city in the early twentieth century, the paradigm of the ‘‘human ecology’’ school of urban sociology. The ethnic ghetto was stigmatized as a place of vice, crime, moral corruption, and public health hazards. This was a time of immigrant restriction and Americanization campaigns. Chicago School sociologists such as Robert Park codified the view that immigrant colonies such as the Jewish ‘‘ghetto,’’ Little Italy, and Greek Town, which occupied the ‘‘zone in transition’’ surrounding the central business district, would eventually dissipate with the eventual upward mobility of working class immigrants into the suburbs and their cultural assimilation into the middle class. Douglas Massey (1985) later articulated this phenomenon as the ‘‘spatial assimilation’’ thesis. Upward social mobility into better jobs and social status was linked with spatial mobility into better homes and neighbor hoods. Ethnic enclaves were seen to create social immobility and spatial entrapment.

The human ecology school held the prevailing view of the social reformers in the early twentieth century that ethnic enclaves were dysfunctional  slums  that  harbored  social pathologies and blight (Ward 1989). During this period of urban growth, city managers and the federal government actively began bull dozing ethnic enclaves under slum clearance policies of the interwar period and urban renewal in the post war period, to make room for expressway arterials, middle class housing, expansion of the central business district, and government buildings. Chinatowns, Little Italies, and Mexican neighborhoods were viewed as obstacles to modernization and cultural assimilation. Herbert  Gans, in the seminal study The Urban Villagers (1962), decried the officials and policymakers who designated the Italian American West End neighborhood as a slum and led to its demolition to make way for middle class housing. In Los Angeles during the same period, a celebrated Mexican American community was razed to make way for the construction of Dodger Stadium. Since the 1960s, however, city managers and planners have increasingly come to see ethnic enclaves as tools rather than as obstacles to growth. The preservation of ethnic places and neighborhoods is of growing utility in efforts to promote globalization in metropolitan economies through the construction of world trade centers, convention centers, and urban tourism.

The growing emergence and persistence of ethnic enclaves has changed the meaning of ethnicity and American identity. Ethnicity in contemporary America is becoming less of an ascribed experience that preserves ancestral traditions, and more of an achieved experience where these traditions may be created and enacted for outside consumers as much as co ethnic participants. Ethnic enclaves are increasingly producing for the export sector of American consumers as well as the protected sector of immigrant consumers. At the turn of the last century, when ethnic minorities were suppressed by doctrines of manifest destiny and assimilation, the sustaining of ethnic food ways and folkways protected bonds of communal social capital and spiritual meaning. In the current era of the multicultural and global city, ethnicity is increasingly tolerated, celebrated, and transacted. Ethnicity has been activated and affirmed by consumers of such culinary trends as Japanese sushi, Chinese dim sum, and Spanish tapas. Ethnicity has also been appropriated and branded by transnational fast food franchises such as Taco Bell. As ethnicity becomes increasingly transacted in the era of global consumer capitalism, the original intention, authenticity, and ownership of local ethnic culture can come under threat.

In the current era of economic and cultural change, ethnic enclaves constitute and convey global processes in US immigration gateway cities. Opportunities have arisen for ethnic entrepreneurs to profit from a growing American interest in consuming and experiencing ethnic foods, music, theater, arts, fashion, museums, and  festivals. The  Civil Rights Movement also resulted in legal and political protections for racial and ethnic minorities, dampening the power of assimilation rhetoric and promoting the sustaining of ethnic cultural heritage and a politics of cultural pluralism. Trends  of economic globalization have led to widespread outsourcing of manufacturing employment to offshore locations, stimulating growth of post industrial activities onshore in a range of industries involving the production of culture for consumption. The cultural endowments of urban regions, like the mineral or agricultural resources of their hinterlands, have become important components in their repertoire of economic activities. The competition among cities for prosperity in the global economy has promoted strategies of urban ‘‘bran ding’’ for entertainment and tourism, to help boost cities suffering economic decline. The ‘‘branding’’ process is promoted through corporate trademarking of office buildings, sports stadiums, concerts, and festivals. Urban redevelopment in the new ‘‘symbolic economy’’ involves the use of devices such as museums, theaters, restaurants, and local cultural districts (Zukin 1995). The growth of the ethnic cultural economy involves the mobilizing of the ‘‘creative capital’’ of a new talented and credentialed class of workers including artists, curators, designers, and chefs, who are qualified in the production and distribution of creative goods. The creative economy has an innovative edge in the area of high technology and a cosmopolitan edge since it prospers in areas of cultural diversity and tolerance (Florida 2002). In the new creative economy of cities, economic innovation links with a pattern of urbanity that draws talented individuals and traders from the hinterlands and other trading regions to create value in products based on taste, fashionability, and design.

A host of social conflicts and contradictions affecting ethnic producers of culture as well as white consumers accompany these trends. Many ethnic enterprises such as restaurants provide opportunities for a ‘‘front region’’ staff of owners, gourmet chefs, and waiters while exploiting a ‘‘back region’’ staff of dishwashers and kitchen assistants (Zukin 1995). Immigrant restaurants may exploit the back region staff with poor wages and working conditions. For the manual workers in the back region of the restaurant, the enclave economy offers certain economic opportunities, but their chances for upward social mobility are as limited as for those who toil in the low wage service sector in such enterprises as cleaning, security, and fast food restaurants. The best advantages of the ethnic restaurant sector accrue to the front region staff, whose profitability depends upon their ability to effectively mobilize their ethnic creative capital.

The marketing of ethnicity carries a host of positive as well as pernicious implications. The consumption experience of ‘‘eating the Other’’ is problematic insofar as it permits white Americans to assume a positive association with the culture of subaltern racial/ethnic minorities while camouflaging ongoing social inequality and white privilege. The growth of an ethnic ‘‘creative class’’ is a stimulus to urban redevelopment through a cultural affairs strategy that promotes the gentrification of inner city neighborhoods and the displacement of low income residents. Issues of cultural authenticity and ownership come to the fore as ethnic neighbor hoods are preserved and marketed like theme parks in American cities. As it becomes increasingly acceptable for ethnic foods and cultures to be consumed and transacted, some forms may become aesthetically incorporated  into  the repertoire of tastes and ‘‘cultural capital’’ associated with the elite social classes in America. Increasing the aesthetic appeal of a cuisine increases its chances for marketability. Some ethnic groups, such as Puerto Ricans, have faced more challenges than groups such as Cubans or Japanese immigrants in successfully creating and defining a market for their cultural products. The production and consumption of ethnicity is a growing factor in the larger dynamics of American social inequality and stratification.


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