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Tuesday, Jul 5, 2022



Senior Reporter

When she arrived in Los Angeles from South Korea at the age of 18, Sabrina Kay spoke no English but she had plenty of ambition.

Working six days a week in her father’s garment manufacturing shop downtown, Kay enrolled in night classes at Cal State Long Beach. After graduating, she took a job as a school administrator and soon saw that her experiences in L.A.’s apparel industry and the world of education were a perfect fit.

So in 1991, Kay opened a fashion technical school of her own.

Now, the California Design College occupies two floors of a Mid-Wilshire office building, has 45 employees and graduates 100 students a year the majority of whom go on to jobs as pattern makers, computer operaters and production managers in L.A.’s garment industry.

“As a woman, it would have been very difficult for me to do this in Korea,” said Kay, now 35. “The opportunity here has been tremendous.”

For three decades, the five-county Los Angeles region has been the premier destination for immigrants, and newcomers continue to stream into L.A. County at a rate of about 112,000 a year, according to the state Department of Finance. More than one-third of all residents in the city of L.A. are foreign-born, about four times the national figure.

Now, Los Angeles is beginning to reap the benefits of that tremendous influx of newcomers, with first-generation immigrant entrepreneurs playing an increasingly central role in the regional economy.

“The fact that Southern California is the front doorstep into the United States means that we’re getting the self-selected groups of strivers from all over the world,” said Peter Morrison, a demographer at Rand Corp. in Santa Monica.

Thirty-four percent of L.A. County’s 667,000 businesses are minority-owned, according to the U.S. Department of Commerce 1992 Economic Census. The survey found 109,104 Latino-owned and 92,209 Asian-owned businesses in L.A. County in each case, far more than in any other U.S. county.

The effects of that surge in minority-owned businesses can be seen throughout the region in places like L.A.’s rapidly expanding Koreatown, where a new generation of Korean American professionals is steadily moving onto Wilshire Boulevard; in the San Gabriel Valley, which thanks to an influx of Chinese immigrants and investors is fast becoming a major Asian business hub; and in enclaves like Huntington Park, which is now 80 percent Latino and has more signs in Spanish than in English.

Those areas may seem somewhat exotic to many Angelenos now, but “they will be going into the mainstream,” said Joel Kotkin, a senior research fellow at Pepperdine University. “And they will end up defining the mainstream.”

The emergence of minority-owned businesses as a force here coincides with the transformation of L.A.’s economy from one based on large aerospace and defense contractors to one driven by small businesses. According to the Economic Development Corp. of L.A. County, 94 percent of companies in the county employ fewer than 50 people.

“California came out of the recession with a new economy, an economy energized to an increasing extent by small entrepreneurs,” said Morrison of Rand. “Immigrants traditionally have been a strong force for that. The fit between the entrepreneurial impulse and the new Southern California economy is an effective one.”

Perhaps the most striking evidence of upward mobility among L.A.’s immigrants can be seen among newcomers from Asia.

L.A. County’s Chinese population, for example, is more than 70 percent employed in white-collar professions, according to the U.S. Census Bureau. Among Southern California’s 450,000 Korean Americans, 69 percent are college educated, compared to the national average of 37 percent; and 59 percent claim an annual household income of more than $30,000, compared to a national average of just 10 percent, according to the Korean American Grocers Association, the region’s largest business organization.

Those numbers are likely to rise in the future, according to William Im, president and chief executive of Wilshire State Bank, one of the area’s top SBA lenders to Asian customers.

A growing percentage of the bank’s loans are going to finance manufacturing, wholesaling and distribution operations, as opposed to the grocery stores and small retail shops that dominated lending activity in the past.

“Most of the immigrants (in L.A. in years past) were middle-aged and spoke little English; that limited them to retail,” said Im. “But the next generation has grown fast and is coming back and changing the face of the community.”

Latinos make up 44 percent of the nearly 10 million people who reside in L.A. County. But despite their greater numbers, L.A.’s Latino immigrants tend to lag behind their Asian counterparts.

Latinos in L.A. County had a median household income of $33,586, according to the 1990 U.S. Census. That compares to $48,555 for Asians and $52,936 for whites.

The reason for the lag is that Latino immigrants tend to be among the poorest and most rural of newcomers and thus require more time to assimilate to life in the United States, said Gregory Rodriguez, a fellow at Pepperdine University’s Institute for Public Policy who studies L.A.’s Latino population.

But in a 1996 study, Rodriguez found that half of the county’s U.S.-born Latinos had median household incomes of above the county mean of $35,000 and more than half owned their own homes two key indicators of social mobility.

Rodriguez also pointed to the unprecedented Latino participation in the 1996 California state elections in which Latinos were elected to 14 of the 80 Assembly seats as well as the Assembly’s top leadership post as evidence of the growing Latino clout.

“It bodes well for the future,” he said. “What you had before was a huge chunk of the population that was reluctant to engage.”

But minority businesses continue to face tough challenges the toughest of which is a lack of access to capital to expand, said Denise Fairchild, president of the Community Development Technologies Center, which provides technical assistance to business owners in the county’s low-income neighborhoods.

Largely as a result of unsophisticated record-keeping, “they don’t lend themselves to conventional financing,” said Fairchild, who also sits on the board of the Community Development Bank, which was formed to pump investment dollars into the region’s poorest neighborhoods.

“For them to break out to the next level, they will have to adapt and find new production methods, new markets, new products,” Fairchild said. “They have to learn more than they’ve traditionally done and find new approaches to grow.”

Despite those difficulties, Alex Lee, a garment manufacturer in downtown L.A., insists that in the future, the competitive edge may well belong to immigrants.

Lee, 32, was born in Korea and grew up in Brazil before coming to L.A. As a result, he speaks Spanish, English, Korean and Portuguese a skill that has enabled his firm to do $5 million a year in business throughout the Pacific Rim.

“We are very well located in terms of Asia and Latin America,” Lee said. “We have an edge over the competition.”

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