Douglas Todd: ‘Ethnic economies’ on the rise in North America

Comparing neighbourhoods by income levels, unemployment, welfare rates and home ownership, Hiebert says residents of enclaves in which one group dominates have the benefit of unique business and job opportunities.

“Ethnic economies are situations where entrepreneurs in a group employ co-ethics and specialize in particular industrial sectors, for example, Vietnamese immigrants in nail salons in New York City or Indian immigrants in the American hotel sector,” Hiebert says.

“Living in the midst of a large co-ethnic group may be beneficial, perhaps by enabling people to access social capital, or perhaps through the employment opportunities that may arise in … ethnic economies.”

A few decades ago, the conventional theory was that ethnic economies formed because immigrants faced discrimination in the mainstream job market. But, with the rise of equal rights in the 1960s, scholars now generally believe it’s frequently a bonus for immigrants to have access to ethnic economies.

Alireza Ahmadian, an Iranian-born research associate at Vancouver’s Laurier Institution, said enclaves fuel ethnic economies because they provide a place where newcomers and strangers can meet co-ethnics and discuss challenges.

“One of the first items on their agenda is business. These conversations sometimes lead to business partnerships. The issue of trust is an important one in driving ethnic economies. For many new and first-generation immigrants, it is easier to trust someone from their own culture who speaks their language.”

Few researchers of ethnic economies have taken on the kind of ethical issues that the co-author of Freakonomics explored in his discussion of possibly discriminatory hiring practices, however.

North American human rights law places many restrictions on hiring people based on their ethnicity, particularly if a company has more than 10 to 15 employees.

For instance, a Mexican restaurant in Houston, Texas, was recently fined for terminating a black and a Filipino employee because they didn’t speak Spanish.

The U.S. Equal Opportunity Employment Commission successfully argued the Mexican restaurant was using language as a “pretext” for hiring only Hispanics.

Despite such anti-discrimination laws, it has become increasingly common for some employers in Canada, particularly in Metro Vancouver and Toronto, to require proficiency in a foreign language.

Albert Lo, head of the Canadian Race Relations Foundation, said it’s often possible to make a legitimate “business case” that a prospective employee might need to speak a certain foreign language.

But Lo said it’s always crucial to keep an eye out for when a language requirement is used as a cover for ethnic discrimination — and for when the ethnic-employee ratio of a company becomes “out of sync with the community it serves.”

Lo, a former real estate developer, said the subject of ethnic economies can sometimes be “divisive.”

In Western societies in which most companies, the public sector and non-profit organizations are legally required to be “colour-blind” — and are pressed to hire employees from a range of ethno-cultural groups — ethnic economies go the opposite direction.

Despite thorny questions regarding discrimination and ethnic competition, the traditional theory that ethnic economies rise because of discrimination in the larger marketplace is now rarely heard, according to the book Landscapes of the Ethnic Economy, edited by David Kaplan and Wei Li.

Source: Douglas Todd: ‘Ethnic economies’ on the rise in North America