BIPOC communities and businesses were devastated by the pandemic and, to this day, are still struggling to make a full recovery. While data has emerged highlighting the pandemics board impact on communities of color, its specific impact on Asian American populations and businesses has not been adequately covered. Asian American Pacific Islander (AAPI) communities had to deal with the heightened economic effects of lockdown. They also had to navigate a spike in hate crimes as the cultural conversation around the pandemic turned racialized and xenophobic.
Today, Asian Americans comprise 6% of the country’s population and own and operate approximately two million small businesses generating $700 billion in annual GDP and employing 3.5 million people (McKinsey & Company). The pandemic disproportionately impacted Asian American businesses because they are overrepresented in high-contact essential jobs or in other devastated sectors. The pandemic and the subsequent lockdowns have had a monumental impact, as evidenced by two cities holding some of the largest Asian American populations. In 2020, 75 percent of Chinese-owned businesses in San Francisco’s Chinatown became nonoperational (Rogers, 2021). Additionally, unemployment dramatically increased from 3.4 percent to 25.6 percent from February 2020 to May 2020 in New York City (Kam, 2021).
Asian-owned businesses across the U.S. have experienced the most negative impacts out of all demographic groups (Rogers, 2021), and the community’s unemployment rates went up by over 450% at a “pace that is not comparable to that of individuals in other demographic groups” (Mishra, 2021). In Southern California alone, 60% of 400 Asian-run businesses surveyed “reported a large negative effect from the pandemic, compared to just 40 percent of all California businesses surveyed by the U.S. Census” (Venkatraman, 2021). Even before official state and city lockdowns went into effect, Asian American-owned businesses were already experiencing double the economic hardship due to harmful rhetoric and misguided fears of the virus (Dang et al., 2020). The COVID-19 pandemic has exacerbated discrimination and xenophobia against AAPI communities, causing an uptick of 10,905 hate incidents against AAPI persons since March 2020 (Stop AAPI Hate, 2021).
Yet, the violence is not an unfamiliar experience. Historically, AAPI communities in the U.S. have experienced xenophobia and racism during economic hardship through racial segregation, discriminatory laws, massacres, and hate crimes. A national study revealed that approximately 40 percent of AAPI business owners reported being blamed for the pandemic. Many community members continue to be reluctant to enter the labor force due to workplace violence and discrimination, jeopardizing their livelihood and safety (Dang et al., 2020). The mental health impacts of this treatment on the AAPI community are significant, as well: texts from Asian Americans to a free mental health crisis line increased by 39 percent in the first few months of 2020 (Dang et al., 2020) and long-term mental health effects, such as depression and heightened psychological distress, were associated those who experienced or witnessed discrimination (Kormendi and Brown, 2021).
The Problem of Access
Although the Biden Administration enacted the Paycheck Protection Program as a part of the CARES Act on March 27, 2020, many Asian American-owned businesses missed out on these funds due to the “first-come, first-serve” basis (Morse, 2022). According to the National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship survey responses from nearly 900 businesses, more than 60 percent of AAPI-owned companies missed the opportunity for aid because they did not know they were eligible for the program (Yee, 2021). Moreover, the lack of an existing relationship with a mainstream bank or credit union – a prerequisite for receiving PPP loan approval – would cause 75 percent of Asian American-owned businesses to “stand close to no chance of receiving a PPP loan” (Thompson, 2020).
AAPI-owned businesses were not only unaware of the programs they were qualified for but were also dealing with language and cultural barriers. With limited language materials, application processes for funding are jarring experiences for many AAPI business owners, especially if English is their second language. AAPI business owners may avoid the process entirely for fear of misinterpreting or completing the application incorrectly because of the legal jargon or complicated instructions. While PPP materials are available in seven of the fifteen most commonly spoken languages in Asian households, language remains a prominent barrier for AAPI communities, especially when “accessible” services, such as the U.S. Small Business Administration online tool, still don’t offer English translation into Asian languages (Dang et al., 2020). There is a distinct need for more accessible materials, professionals with applicable cultural and language skills, and more awareness of these programs from government programs. Otherwise, these financial and supportive resources will go untouched by the AAPI community.
Centering AAPI Communities in an Equitable Recovery
From an economic standpoint, centering AAPI groups in a recovery plan is crucial. Asian American-owned businesses comprise 26 percent of accommodation and food services, 17 percent of retail trade, 11 percent of education-service companies, and the business community “outperforms the national average on business ownership and employment” (Dang et al., 2020). This community also provides for others – Asian American businesses are more likely to employ more than one person (25 percent compared to 13 percent of all U.S. businesses), and approximately two million Asian Americans (a larger proportion than their population represents) work in high-risk frontline and essential jobs, especially in the healthcare field (Dang et al., 2020). To diminish the hardships and inequities that this community experiences and ignore the positive economic impact AAPI groups provide would be a grave mistake, and addressing these issues is increasingly urgent to an equitable recovery plan.
Moreover, the Asian American population is continuously growing, and calculations predict that by 2055 it will be the largest immigrant group in the U.S. at 38 percent (Dang et al., 2020). It is worth noting that there is a vast array of demographics represented within the umbrella categorization of “Asian American” – in English language skills, education levels, employment and income, and more – that leaders should take into account in the development of policies and COVID recovery efforts.
Philanthropy’s Role in Supporting AAPI Communities
Even as some sectors gradually recover from the economic hardships of the pandemic, multiple barriers and a general lack of community solidarity and support have caused Asian American-owned businesses to struggle to bounce back. Now more than ever, the AAPI population needs help from its neighbors and community. There are several key ways philanthropy can take action to support AAPI-owned businesses:
Support AAPI-owned businesses by donating to various AAPI networks, funds, and charities or partner with AAPI organizations to reduce the barriers and challenges of application processes from funding programs. For example, the United Postal Service (UPS) has established the Proudly Unstoppable program, which provides up to $5,000 in grants to small AAPI-owned businesses. The Asian American Foundation launched the AAPI Giving Challenge, a multi-year campaign to unlock resources from foundations, corporations, and individuals. IFundWomen of Color is a crowdfunding platform that allows AAPI-owned businesses run by women to fundraise from small investors.
Sign on in support or advocate for legislative bills that address Anti-Asian racism or increased funding for Asian American-owned businesses during crises or economic hardships. Encourage your organization to call or write to your local representatives for their support in establishing more accessible funding programs and anti-hate crime laws. Examples include President Biden’s Executive Order on Advancing Racial Equity and Support for Underserved Communities through the Federal Government (issued in 2021); CA SB-1161 to protect vulnerable groups on transit systems (pending); and CA AB-2549 to bring awareness to street harassment as a public health issue (pending). Legislation is not a terminal fix for these issues, but it is a good step toward recognition and action.
Start and encourage conversations to increase awareness of injustices AAPI businesses and individuals face. Use social media platforms, external communications, or time during internal meetings to highlight and uplift the voices of AAPI community members. Look out for social media toolkits prepared by nonprofits or agencies, like this one from the U.S. DHHS Office of Minority Health.
Reach out to your network connections working with AAPI communities to combat racial injustices and violence and protect AAPI community members experiencing xenophobia or racism. Enroll your organization in bystander intervention training to take action or de-escalate a harmful situation. Increase your understanding of the unique challenges faced by diverse AAPI populations by engaging in this recorded webinar hosted by the American Hospital Association.
The road to recovery for Asian American-owned businesses is twofold: financial and resource-based support partnered with racial equity work to mitigate racism and xenophobia. As crucial as it is to assist small companies financially, our sector must address discrimination against AAPI populations so communities can flourish in solidarity. By offering the space for anyone and everyone to engage in dialogue, increasing awareness, or promoting local AAPI-owned businesses, the livelihood of AAPI communities can improve tremendously. The philanthropic sector and other community members can utilize their networks and resources to provide support and advocacy to ensure that small Asian American-owned enterprises have an equitable opportunity to thrive and recover from the pandemic.