American Dream, part one

Kate Cooney (00:00):  

This is CitySCOPE. 

Eun Sun Cho (00:01):  

A podcast on cities and inclusive economic development from the Yale School of Management. 

Kate Cooney (00:07):

Are we ready? 

Manuel Morales (00:08):

Let’s go.

Kate Cooney (00:24):

Welcome to episode 2 of season 3 of the CitySCOPE podcast. I’m Kate Cooney, senior lecturer at the Yale School of Management and founder of the Inclusive Economic Development Lab. We’re calling episode two, “The American Dream” episode, because when we’re talking about entrepreneurship in America, we’re cutting right into the heart of what we tell ourselves about the opportunities this country provides. We begin by speaking with Zulema Valdez, a leading scholar in entrepreneurship with a focus on immigrant entrepreneurs. 

Zulema Valdez (00:55):

I’m Zulema Valdez. I’m the professor of sociology at UC Merced, and also the Associate Vice Provost for the faculty.

Kate Cooney (01:03):

One more thing I should say by way of introduction, Zulema and I were in grad school together at UCLA in the late 90s, early aughts. Zulema and I were in this seminar called Two Thirty Seven, which was a really interdisciplinary group, although its home was in sociology run by the wonderful Rebecca Jean Emigh, who was both of our advisors. And it was this kind of famous seminar because you went in and you didn’t present anything, you just sat there and Rebecca would have all of us, she would force us, this is part of our practice to learn how to ask academic questions, ask around the questions. And then as the speaker, you had to just take notes on all the questions and then answer and then another round. And it was a lot of fun. And over the years, we would present our work, and that was this big rite of passage. When you got up in front of the firing squad and gave your paper. Hopefully this will feel familiar in that regard, but not like a firing squad.

Zulema Valdez (02:05):

It won’t be traumatic because that was so hardcore. I don’t know if you remember, but there was more than that more than one guest that would be in tears in a bathroom afterwards because it was pretty grueling because you were expected to answer questions to a reading that people had one week in advance. And that was it. There was no other thing happening.

Kate Cooney (02:35):

Yes, and it was a long hour and a half or however long it was. It was great to reconnect with Zulema and revisit her work from my current vantage point, thinking about Black entrepreneurship and regional economic development. Zulema Valdez is author of the books The New Entrepreneurs, How Race, Class and Gender Shape American Enterprise, and Entrepreneurs in Search for the American Dream. Zulema’s work operates at the intersection of American ideology about the power of entrepreneurship and the empirical reality of the lived experiences of entrepreneurs, particularly women and entrepreneurs of color, for whom this mythology doesn’t always translate into reality. Like so many of us in the space Zulema’s critical appraisal of the literature on this topic is born from her own lived experience.

Zulema Valdez (03:32):

I was at UCLA as a graduate student, and I was taking some courses from the Roger Waldinger, and Ivan Light who are the foundational scholars in this area of ethnic and immigrant entrepreneurship. Even as an undergraduate, I was reading articles and works about immigrant entrepreneurs that didn’t really resonate with the entrepreneurs or the immigrant, self-employed folks that I knew. Most of those folks were struggling mightily, may have not succeeded in terms of economic progress or mobility. Most were not talked about in the literature, which was really geared towards this whole kind of, almost what we would call today, respectability politics around immigrant dreams of America and this rugged determination to start anew in this new place, beyond all obstacles, be very successful. That just did not resonate with the experience that I had, which was that I grew up in a Mexican-American community in Fresno, California, in the Central Valley. Many, many of my family members were in the construction industry and things like that, and a lot of my cousins and friends would be working with these folks. So in some ways it was, “Oh, this sounds like ethnic entrepreneurship where you’re creating social capital, and there’s some cohesion between immigrants who have their kids working with them.” And it sort of sounded like it, but rarely did it lead to dramatic, you know, economic mobility. That was kind of my contribution to that field, let me talk about the groups are not considered entrepreneurial, of which Mexican-Americans and Black Americans were at that time, right, not considered entrepreneurial in that sense. Cubans were the only Latin American origin group that was kind of in that space along with, you know, Chinese, Japanese American and immigrant groups. And they were kind of taking all of the oxygen out of the room, and it was written by these people who were committed to this ideology of entrepreneurship.

Kate Cooney (05:48):

Part of what Zulema’s work draws attention to is the way in which the literature about entrepreneurship among people of color is itself shaped and segmented in ways that mirror the racial and ethnic hierarchies in American society.

Zulema Valdez (06:02):

If you look at the literature as soon as you talk about an ethnic entrepreneur, you’re typically talking about an immigrant or recent ethnic minority of some kind. So you start talking right away about particular Asian groups or Latino groups, the ethnic entrepreneurship literature has rarely, rarely considered Black entrepreneurship within this literature of ethnic entrepreneurship. And in fact, when they do, when they say, I’m going to talk about Black entrepreneurship in this literature. They may call it African-American entrepreneurship, because what they’re trying to do is signal that African-American is similar to an ethnic identity like Korean-American. Then they point to the Great Migration from the south to the north to escape exclusionary race policies from the south, and they call it the Great Migration. And by calling it the Great Migration, we’re also able to at least say it’s similar to an immigrant migration. So they kind of like, do that to be able to compare them. But mostly the literature does it. And when you’re looking at Black entrepreneurship, you might find tons of that research in Black self-employment. And so then there’s division in the scholarship between people who talk about entrepreneurship on the one side and small business ownership or self-employment on the other. These two groups of scholars don’t talk to each other, and you’ll find more on the Black entrepreneurship or Black business in the self-employment and small business work than you do in the entrepreneurship work. So the ethnicity and race relationship in this literature deserves more attention. It’s very similar, by the way, to assimilation. What groups do we talk about when we talk about assimilation? So the groups at the turn of the last century, right, we’re talking about the immigrants that were Irish or the Germans or the Italians or the Mexicans or the particular Asian groups. And we start talking about like, are they going to assimilate? So that whole literature is not also not talking about Black Americans. Black Americans are not being looked at in the assimilation incorporation literature in the same way that they’re not being considered in the entrepreneurship literature. And it’s because the entrepreneurship literature and the assimilation literature is looking at immigrant incorporation. And so they’re much more focused on the ethnic part of the story, and they’re not interested in the Black part of the story or the race part of the story, right? As soon as you start talking about race, you’re not talking about assimilation anymore. And when you talk about entrepreneurship, now you’re talking about business ownership and there’s problems in the discourse and also in the debates are quite separate. So I think it’s really important to try to put them in. And by the way, you do have to put them in by saying that they’re African-American experienced a great migration. You can just say there’s Black entrepreneurship and there’s some ethnic entrepreneurship and there’s some immigrant entrepreneurship. These are all classifications of identity. You can actually also have an ethnic and a race at the same time. And what I do problematizes how social capital might be built on those different kinds of identities, as well as gender as gender, another category of identity. So this is where the importance of intersectionality in entrepreneurship works and assimilation work becomes really critical.

Kate Cooney (09:37):

So let’s dig in. In the ethnic entrepreneurship literature, there’s a lot of attention to the role of the ethnic enclave, the immigrant neighborhood as this important setting for launching the immigrant entrepreneurial journey.

Zulema Valdez (09:51):

One of the things that this whole literature underscored is the notion of group cohesion and solidarity. So that you were relying on your coethnic community for support in order to generate the resources that you needed to start a business, but also the business itself in an enclave might have been specific to the needs, the food, the kind of things that an immigrant community used. And so they could cater to that immigrant clientele and provide that service in the enclave without really even needing to learn the new language or even go beyond kind of what your community preferences are. And those kinds of things.

Kate Cooney (10:45):

The clustering of coethnics in enclaves creates networks of social, ethnic, and family ties along which resources flow, small loan pools between households, easy access to labor for businesses, even a market for ethnic goods and services. Tim Bates, professor emeritus at Wayne State University, an expert on minority business enterprise in the U.S., reports that it is common for small businesses to generate key resources through social and family networks, especially when it comes to employee recruiting.

Tim Bates (11:21):

One thing about small businesses that is important to understand, it’s called network hiring. Network hiring is not complicated, it’s the point of startup. The typical small business owner, starting a firm, hires family members and friends, maybe a few friends of friends. It’s hiring within the network. People know each other. Going to work in this network environment is not entering an alien environment, but a very supportive environment. As the firm progresses and more employees are added, trusted employees are generally very, very important as a referral mechanism. They recommend their friends who they feel would be good employees. So once again, people were being brought into the firm into a supportive network where they already know people and they have really, in most instances, a mentor who will help them adapt to the firm. That’s a very important virtue of small businesses. That’s one reason that wages and salaries notwithstanding, people tend to prefer to work for small businesses, although they’re often lured out of the sector if higher wages are offered elsewhere. But it’s a comfortable environment.

Kate Cooney (12:39):

But as Zulema’s work points out, the ethnic entrepreneurship literature lifts practices like these and embeds them in a cultural narrative about the role of the ethnic enclave that celebrates some entrepreneurs of color and by din of comparison, suggests that others are lacking.

Zulema Valdez (12:57):

But the reason why I take a pretty critical view of even the enclave literature is because there is always a cultural foundation in this work when we’re talking about who’s enclave matters for generating resources that can then springboard into a business. When we think about the work at that time, OK, I want to kind of also remember that kind of historical period in which people were writing about culture and the salience of culture for immigrant and ethnic entrepreneurs, which those conversations were not happening about white entrepreneurs or American white entrepreneurs. We were not talking about their cohesive communities that were generating resources that could springboard their businesses. But believe you, me, white folks have networks that helped them generate businesses, and those are wildly successful and more successful than any immigrant group we would talk about today. And the opposite also is true that are we saying that there are some communities that are also segregated communities? At that time, people were talking about culture of poverty. Right? So ghettos or concentrated areas of poverty akin to what you know, William Julius Wilson was talking about in the declining significance of race, where when we talk about those communities, they were not talked about as generating resources and community solidarity. They were considered and characterized as isolated communities devoid of entrepreneurial opportunities and not having the resources to get over and start a business, right. And in fact, those communities often had immigrant entrepreneurs, middle men, minorities who go into Black communities and serve that purpose of those kind of small businesses in those areas. For me, the salience of culture, the salience of ethnicity and talking about an enclave that would then be generative for business was a cultural argument and one that I had a lot of problems with because I didn’t think that it really identified what the problem was in businesses that are not having that same enclave effect, basically that they didn’t have the access to resources or capital that was necessary to be able to springboard. And I’ll give you one example of that is this idea of a rotating credit association, which a lot of different books and articles have written about. This idea that there are these immigrant communities and based purely on the solid touristic traits that they see in each other, they’re from the same village or they’re from the same town that they speak the same language that they would trust each other, enforceable trust to all contribute to a rotating credit association, which would provide a good sum of money that they could then take and used for a business. That a whole idea is predicated on being able to come up with the resources to even launch a rotating credit association, some of which started was about $10,000 each person. Right? Most of the people in the Black community or the Mexican-American community were like ten thousand dollars. If I had $10,000, I would already have a business. I don’t need to have a rotating credit association, that would be sufficient. So the fact that there is unequal resources that some groups in some communities could use for a business, that’s the whole cultural layer that is embedded in ideas of the enclave. And if you are not able to do that, if you’re not able to gather the resources necessary from coethnics, then it’s not an enclave. That is something else. It’s a ghetto or it’s a barrio, not an enclave, because that doesn’t fit. So it’s the discourse around that is what I find problematic. Now if somebody wants to say, Yeah, that is true. They have rotating credit associations and they did have small business owners. We see Chinatown. We see Koreatown. We see how that worked. Yes, there was a disproportionate number of business owners from those particular communities. But you can root that not in some kind of cultural orientation, but an access to resources.

Kate Cooney (17:18):

There is discussion about the role of the Black ghetto as functioning much in the same ways as the ethnic enclave. But it’s a different kind of narrative than is told in the ethnic entrepreneurship literature. It’s a story that’s told in a before and after narrative. Here’s Gerry Jaynes.

Gerald Jaynes (17:37):

Officially the A. Whitney Griswold, professor of Economics, African-American Studies and urban studies at Yale University. It is almost impossible to convey to you how bad race relations were in just the 1950s and the 1950s were a lot better than the 40s or 30s, but it was bad. It really was in 1960 and certainly 1950 apartheid. Wasn’t really all that different from being in South Africa. Certainly, if you were in Georgia, Alabama, or Texas and only a little bit better if you went to Chicago or other places because we lived in parallel separate societies. Now what that meant was there’s a ceiling on where any Black person could what you could rise to because it was going to be dependent on what was available in terms of opportunities and income levels, say, purchasing power of the Black masses. So that whole idea about linked fate if you’ve ever heard that term. All Black people were in a linked fate. Together, because it wasn’t going to be possible for a large number to improve their status without a very large proportion improving their status. The thin line then was you have this, I don’t know, maybe a quarter of the Black population that would be like me or better off. And then you had the rest of it. And so where would a business class come from? Well, it would come from that twenty five percent and it would also come from very exceptional individuals who are able to succeed even if their parents were illiterate cotton farmers or tobacco farmers. So 1950s, 60s, 70s. That was the problem for Black entrepreneurs. You’re going to have a few people who have been advantaged. Who are going to be able to move into better schools and colleges, get better jobs, and there’s going to be an even smaller number of exceptionally talented athletically or gifted academically or entrepreneurial or entertainments. But we know. I just named all. All of those are very high talent areas that’s going to be a small group of those who come out of that mass that are going to be able to be highly successful, too. But then you’ve got the rest. By 1980, with things opening up, very talented African-Americans now have much more opportunities. The people who have been, in 1950 or 1940, would have been forced to operate in that completely segregated parallel society, now can go into professions, can go work for corporations. And as a consequence, there’s a kind of hollowing out now of an entrepreneurial class. And we’re still kind of dealing with that, although it’s getting better.

Kate Cooney (21:24):

Tim Bates echoes this point, that it might be material resources and human capital differences that drive entrepreneurial outcomes as much as any cultural explanation. Further, there’s not a monolithic story. The diversity of experiences under the category of minority entrepreneurship or immigrant entrepreneurship are important to recognize.

Tim Bates (21:47):

So what’s going on here? When we get into minority businesses and try to peel that onion, it gets a bit complicated when we look at legal immigration during the 21st century. The single group of immigrants that stands out as most numerous is Asian immigrants. Immigrants, particularly Asian immigrants, tend to be college graduates. The majority of adult Asian immigrants in the 21st century have been college graduates. They tend to come with resources. They tend to come from family backgrounds that place them high in the socioeconomic hierarchy, in their home countries, and they tend to be inclined to create businesses. A work by Professor Fairlie has tracked through the years the fact that immigrants generally are much more likely to pursue small business as their line of work than non-immigrants. Among Asian self-employed, Asian small business owners in this country in 2016, approximately 80 percent were immigrants. Among Latinos, the data are a little more mixed, but at least 50 percent of Latino small business owners in 2015 were immigrants. The immigrant story is a complicated one, and it’s not simply the pool of opportunity, the lure of lucrative existence that’s drawing some of these immigrants into self-employment. Koreans come specifically to mind. Korean immigrants are numerous to this country, and they stand out as they are the group least likely to be fluent in English. Without English fluency, they are often drawn to relatively marginal businesses like small scale retailing in minority neighborhoods. This would be a push rather than the lure of opportunity, pulling them into more lucrative areas like high tech. We have the lack of English fluency limiting their job opportunities, so they end up being pushed off by this minimal opportunity to work as an employee into setting up their own small businesses.

Kate Cooney (24:07):

Gerry Jaynes continues along this theme.

Gerald Jaynes (24:11):

We think about immigration coming out of Korea, South Korea, for example. What do we know about that immigration? Korea, a lot of nepotism, a kind of closed society because of that nepotism. And hopefully it’s breaking down somewhat now, but certainly in the 60s, 70s and 80s, when we’re getting our largest influx of South Koreans coming into the United States, they are what would be a lot of the Korean middle class talented people. A lot of people were schoolteachers, small business owners, people who knew that they were going to be blocked by the underlying nepotism that permeated Korean society and saw opportunity. So this is a very energetic, talented group of individuals who come and infuse the United States with a lot of entrepreneurial energy. And now a lot of academic energy as well. So South Korea made a big mistake, very similar to the United States gaining just before World War Two and right after because we gained all of those German Jews who flee Nazis. And we get that infusion of talent and energy.

Kate Cooney (25:34):

Professor Gerry Jaynes contrast the push-pull trends in immigration and levels of human capital and the immigrant populations of the second half of the 20th century in the United States, with that of the Black American population of the same era.

Gerald Jaynes (25:48):

Keep in mind, my childhood as the 1950s and early 60s, the majority of Black born when I was born, late 1940s, backgrounds were rural south. Their parents likely were sharecroppers on a cotton or tobacco plantation. They literally had third, fourth grade educations, and that just meant they had gone to school for four years, they really didn’t read or write as a fourth grade level. They were functionally illiterate. I can say this because some of the people that I grew up with, that’s who their parents were. So I know this to be the case and I’m extrapolating now, but keep in mind, this is the post world 1940 migration of Black people out of the rural south into southern and northern cities. And that’s what the majority of their situation look like. So the next time you might run across a Black person or run across a stereotype, particularly about a Black first academic achievement or anything like that, I want you to keep in mind if that person is your age, their grandparents probably couldn’t read at all. Their cuisine was probably limited to a half dozen things they could cook. They literally, if they came off, the plantation, did not use eating utensils, they ate with their hands and fingers. There were also Blacks who owned land, who were relatively better off, had better schooling. Once the civil rights movement opens up in all the different avenues. Politics, education, business, wherever it might be. They were able to take advantage of it. The people who were coming from the situation, but I just define or described. They weren’t going to be able to take advantage of it.

Kate Cooney (28:04):

Over the past 20 years, the ethnic entrepreneurship literature has responded to the critiques of Zulema and others by including moderating factors in their theories of entrepreneurship, such as opportunity structures, which reduced the cultural explanation but did not entirely let it go.

Zulema Valdez (28:23):

When I was involved in reading all these materials about particular immigrant and ethnic groups that were quote unquote successful because they had disproportionate rates of self-employment compared to U.S.-born native counterparts or whites, that was the example was that the cultural part of it is a salient feature of the ability to go into entrepreneurship. And then some folks were starting to talk about. And this is also of the same folks. I want to give them their due, right, Ivan Light, Portes and Bach and Portes and Joe and Roger Waldinger were all starting to talk about the opportunity structure of the economy that would be brought. Roger Waldinger’s work, and Portes was talking about modes of incorporation, which has to do with kind of a combination of the economic context in which a person is being dropped into plus labor market opportunities, plus the ethnic group community factor. Right. And so what happened was there are starting to be a development of multiple forces at play that could be mixed and matched in particular ways to explain one group or another’s success. And so it is a bit more comprehensive in that it’s not just pushing the culture line so hard, but it also required the cultural piece. Taking that kind of approach even when you were thinking about, well, it’s a hodgepodge of factors, right? I mean, do you move into a community where there’s coethnic solidarity? Are you coming with legal status, for example, you come in as a migrant community that has refugee status or you come in as a legal permanent resident. These kinds of statuses can help you in a way that if you’re coming, say, undocumented across the border, you don’t have access to those kinds of resources. So you know, we’re looking about those pro-immigration characteristics. Also the ways in which you incorporate into a community, whether there is a professional class of refugee coethnics in the community. All these the kind of things matter. But, I also kind of thought, well, if we have a whole list of things that we need to think about that mix and match in particular ways to predict successful entrepreneurship, that’s not really a theory. It’s more of a model or it’s a framework for explaining it. But you’re kind of looking in the rearview mirror all the time and saying, Oh, well, they do have this, oh, they did live there and oh, they were this category of citizen or it’s not predictive, it’s explanatory, but it’s not predictive. And in that way, it’s not really a theory of entrepreneurship. It’s much more of a framework or a model to explain entrepreneurship that you’re looking at.

Kate Cooney (31:15):

Any comparison of rates of entrepreneurship and entrepreneurial performance between immigrant entrepreneurs of color must also contend with the nature of the competition for producing ethnic or culturally specific goods and services.

Gerald Jaynes (31:30):

The one thing about Black in the United States, Black culture is highly commodified, so there’s no sex and fighting that as some people try to do. You should look at it, then figure out how you can make it work for you. So for example, I always kind of laugh when I read comments like the following. I just read something actually yesterday. There was a complaint about all white people wearing dashikis. Dashikis are a kind of African dress. It’s just basically a very loose fitting shirt that has a hole in the top that you pull over and you wear. Right. And it’s African, it’s African wear. And during the 60s and 70s, when Black people started to get their suits, their race consciousness. We started wearing dashikis. Because before I get into other things, Black Americans were ashamed of Africa. And I won’t get into why, but mainly it comes from the fact that white America debunked Africa so Black people didn’t want to be associated with. Right. So Black people were wearing dashikis in the 60s and 70s and afros. And so this person is complaining. White people are wearing dashikis they’re taking over our culture or a white person maybe covers a song that a Black person had a hit with 10 years earlier, and some Black people get angry. Here’s the problem. If you come from, I don’t know, pick on somewhere, I don’t know, Chile and you start a business around some concept which is well known in Chile. There aren’t a whole lot of Americans who can appropriate that because we don’t know very much about Chile. So now you can say the same thing, frankly, is going to happen, we don’t see a whole lot of European Americans, although I have seen a couple operating Chinese restaurants or operating Thai restaurants. But on the other hand, African-Americans been in the country for 400 plus years. Anything we do, there’s a whole lot of white people that know all about it. So when we attempt, we’re going to have more competition from whites. And I would say that if we go back to that pre 1950 or 1960, when we’re talking about where we go, where we got that separation apartheid and we’ve got this really pretty dismal entrepreneurial performance of African-Americans. One of the important reasons for that is white competition.

Kate Cooney (34:35):

Let’s take a look at another aspect of the ethnic entrepreneurship literature. There is this emphasis in the ethnic entrepreneurship literature on how resources from coethnics are accessed more easily in the ethnic enclaves and provide a foundation for a successful entrepreneurial risk taking. As we’ve mentioned, resources like coethnic labor or the tacit knowledge that gets passed along extended kinship networks. Zulema Valdez’s work illuminates that even within communities where ethnic entrepreneurship is thriving, there are gender dynamics that complicate the experiences that people have in practice accessing and utilizing these resources. Here we talk with Zulema about the findings from a 2016 article she wrote on intersectionality, the household economy and ethnic entrepreneurship. This study was based on an oral history project with 50 Mexican-American entrepreneurs.

Zulema Valdez (35:33):

I had been invited to present some of my work at UTEP and met Kristine Navarro and heard about the oral history project, and I was like, Listen, this is really good data because it’s looking at middle class Mexican-American business owners in El Paso. What was really interesting about that data was that it was a Mexican-American group of middle class, educated business owners to really disentangle the idea that a Mexican-American business owner is always a survival strategy. Entrepreneur is either the fruit vendor or the domestic worker and the gardener. And instead, these were people who owned engineering firms or who were doing kind of personal services and starting businesses about that were related to their education, basically, their skills in education or their B.A. or their MBA. So I loved the data and I wanted to really kind of get into it. But what I was struck with immediately was here’s a group of folks who are middle class doing all the right things and how do they think about entrepreneurship or their families or passing it on? And right away, what I looked at and what was really coming through was. The women, if they were a business owner, they were the business owner. There wasn’t the same kind of familial support for the business. They may or may not have had their kids working for free and the business. Their partner, husband, and it was quite heteronormative, the husband would have a different business that they were doing not their own self employed business, but they were they had they had an employee gig somewhere. But if you were looking at a male business owner, his wife was inevitably working in the business in some capacity, whether like doing the books or taking care of the customer base or whatever. And the children were asked to do what we know is like family unpaid labor. So right away, there seemed to be this. If a woman is a business owner, she’s doing it on her own. And as the man is doing business, his whole entire family is involved, but he still gets to be the owner of the business, and it’s not considered. He doesn’t say like it’s the family business, he says, it’s my business. Women would say it’s my family business, but they’re working there by themselves. So there with the dynamics of gender were absolutely just very clear, as was the ideas of if I passed down this business, my son will have it, regardless of whether it was a man who owned the business or women who owned the business. And if there were multiple children, the child who was identified as the one who would take over would be one of the sons. Or there were all these conditions put on the female siblings. If they were going to take care of it, then it’s not just her business. She has to kind of help, you know, it’s for the family. And this also was something that I noticed when women or daughters would have a lot of education and experience in the business. And so they seem to be the one that might be the natural recipient of the businesses. Nope, it’s not going to be given to her, it’s going to be given to like Johnny, who kind of flunked out of college, and we’re not quite sure what’s going to happen to him. So he is going to get the business. And it was just it was very, very apparent to me that these kinds of gendered and class about hereditary, you know, about inheritance were shaping opportunity even within a family unit about who could be entrepreneurial. And the reason why this is important is because the differences between who gets to be an entrepreneur in that kind of a family setting could be more stark than the differences between ethnic groups. Success in entrepreneurship, meaning that there could be a difference between girls and boys having access to their parents’ business that was larger than the differences between, say, Koreans and Latinos in being able to own a business and looking at the family unit just created a different kind of level of analysis that wasn’t at the ethnic group level, it was at the household level and you could still see the dynamics working there that were pretty significant when you were considering those kinds of factors. And so that’s why that that’s at the household level. You could see how intersectionality was playing out. In my other work, you can also see how intersectionality plays out even within the ethnic entrepreneurship work and research, right? A lot of people are like, OK, we’re going to look at ethnic entrepreneurship, and at the end of the paper, we’re going to throw gender and because we saw some stuff about that. And it’s like, Well, you know, if we’re going to think about gender is additive and we’re not going to bring it into that story of ethnic entrepreneurship to begin with, and in some ways, we’re like identifying ethnicity as the primacy of ethnicity, in that particular arrangement, we’re actually missing the part that’s the fused part with the gender piece that if you looked at gender separate from ethnicity, it would also look stark in these other kinds of ways. And so just underscoring ethnicity or nativity for some kind of cultural argument was, I thought, you know, why are you picking one over these others? I mean, gender patriarchy is something that exists in the United States and actually is more stark of a determinant of life chances than ethnicity in many, many realms. But the fact that it would be this additive thing at the end of a paper is kind of like, why are we? Why are we privileging the ethnic story? Or the nativity immigrant story? Which of course, we know why because hashtag, you know, American dream.

Kate Cooney (41:50):

You highlight this one story of the daughter of an entrepreneur who eventually became an entrepreneur, but it was this very winding road where from the middle class parenting she got, she was encouraged to get educated, but it was only in certain kinds of industries like pink collar industries, nursing or education. And so she pursued that. And marriage was very much encouraged. But then when she got divorced and then was working and then eventually found her way into entrepreneurship, and she had access to all this tacit knowledge in the family and some capital to help with the business. But like you said, she had to split some of the profits with her sisters. Where then you come to find out the brothers had all gotten businesses inher-, you know, just given to them, from the from the parents, the father. That was a very stark example of that.

Zulema Valdez (42:42):

Yes, that was a really interesting story of an extremely successful Latino entrepreneur who made sure that his sons each were going to get a business that they would run. And then she had to fight very hard to have the same opportunity. And in fact, it never was the same opportunity because even when he was finally kind of like, OK, we’ll give you this one business if you want to go and try it. And then she had to kind of share the resources. So it was like a family part of the business that would be shared across other siblings. Those kinds of things are real, and these are businesses that are successful, right? Many of the other businesses that we’re thinking about small business owners, small groceries, or the liquor store or those classic, you know, cleaning, restaurants, these are much harder to pass on because they don’t necessarily last out that long. Right. So business ownership is, it’s a it’s a very hard thing to do, and it doesn’t matter how hard you work, sometimes it just doesn’t work, right? Most businesses end in failure. So these are the these are the ones that are doing well, and this is what it looks like.

Kate Cooney (43:56):

What’s interesting now is that in large data sets tracking entrepreneurship, such as the Global Entrepreneurship Monitor, we see a lot of growth in the rates of entrepreneurship among women of color. In fact, in the most recent data, the highest rates of entrepreneurship are among women of color entrepreneurs.

Zulema Valdez (44:16):

So the rates at which women are engaging in entrepreneurship is faster than other groups. The percentages are increasing. The rate of increase is very high for women generally and then Latina women in particular. So that’s an interesting thing to see. Right. And we look again, I wouldn’t want to say like, Oh, that’s because they’re women and they are being empowered through the MeToo movement. Not necessarily, but there’s something going on in the economy that might be driving this particular group to go into it more. Now, given COVID, and we’re still kind of, I guess, we’ve kind of gotten past the recession, but we might be entering another recession now. Of course, you know, the problem with entering in a crisis is it’s also hard to make it right because the conditions are actually very volatile.

Kate Cooney (45:04):

Zulema Valdez, as a young graduate student, set out to explore the disconnect between the celebration of ethnic culture and solidarity as an explanatory driver of ethnic entrepreneurship. Even today, after decades of research showing the limits of entrepreneurship for mobility and economic development, she still finds that those myths are hard to dismantle. What would you say that we’ve changed our mind or updated our understanding of whether ethnic entrepreneurship is a successful economic strategy? Do we have a more nuanced understanding of what that pathway can do for a family.

Zulema Valdez (45:44):

I do not think so. If anything, it’s gone in the opposite direction where individuals are responsible for their own success. All I’m saying is the conversation around entrepreneurship as a way to economic mobility, or even on par with a regular job in the labor market. I’m not sure about that. And so I want to question that idea that successful entrepreneurship does not necessarily mean mobility. What it means is that there’s a higher percentage of that particular population who’s self-employed or identifies as such. That’s successful. That’s why we talk about Korean entrepreneurs who one out of three men own a business. They call that successful entrepreneurship among Korean among the Koreans there. We’re not talking about income, and we’re also not accounting for hours worked. So when we look at entrepreneurial income, we tend to look at it as the annual income. We don’t look at it as an hourly wage because if you do think about 80 hours a week, all of a sudden that one hundred thousand dollars doesn’t look so great.

Kate Cooney (46:58):

And no one knows this better than the entrepreneurs themselves. Here’s Fred McKinney on his work, setting up an entrepreneurial ecosystem in the university setting. We’ll be hearing more from Dr. McKinney in episodes three and four. Here’s a little preview.

Fred McKinney (47:14):

My name is Fred McKinney. I’m the Carlton Highsmith Chair for Innovation and Entrepreneurship at Quinnipiac University and the director of the People’s United Bank Center for Innovation and Entrepreneurship, also at Quinnipiac University. Many of the students at Quinnipiac, many of them are first generation students, and also many of them are coming from families where their parent or parents owned businesses, so they actually come from an entrepreneurial class. But what I’m finding, one of the things that’s interesting is, you know, while entrepreneurs are great folks and they enjoy doing it and I enjoy being around them. Many of my entrepreneurs don’t want their children to be entrepreneurs because they understand how hard it is. And you know, getting a job is much easier than being an entrepreneur. Get a good job with a good company. You don’t have to worry about whether the paychecks going to arrive. You know if you’re entrepreneur, again, you know, residual claiming. And if there’s no money there, there’s no money there is. So that’s risky. It’s kind of like, OK, you want us to do what our parents don’t want us to do. And then yeah, if you do it well, you’ll be glad you did it. So you’ve seen it. You’ve seen the good, the bad and the ugly.

Kate Cooney (48:34):

The numbers are quite stark in the data showing the drop between generations, where you might have a high level of entrepreneurship in certain immigrant groups, but not in their children’s generation.

Zulema Valdez (48:46):

If you look at intergenerational mobility, so you have a percentage of people who are entrepreneurs like Koreans, which are about 20, 30 percent in the United States as immigrants. The second generation, it’s about 12 percent, so they lose 20 points in one generation as those kids go into college and do other things. So I’m much less likely to look at cultural explanations for it because I talk to a lot of people from a lot of different cultures, and they talk about their culture in exactly the same way as driving their entrepreneurial ambitions. But it can change from one country to the other, and it can change within one generation. So then I’m like, Well, how primordial? How salient is that culture when it disappears? When you cross the border, it disappears in the second generation. So I’m much more likely to look at the other context of reception or the other factors that are motivating the people who engage in it. That’s the kind of my contribution to the entrepreneurship literature is to kind of like, throw it in this critical space and start pushing people to think is it a really good idea? After doing the work that I’ve done for 15 years, I think you can’t beat 40 hour workweek with a paid vacation and a 401K and health care. But that’s not what people want to hear. That’s kind of where I am. But I also recognize that if you do have six hundred dollars and it’s the first time you ever had that much money to do something with. That’s your shot. So people do. People will try to make that happen because that’s their shot to do it.

Kate Cooney (50:25):

Join us for episode three, where we continue this conversation in part two of the American Dream: Making It Big.

Manuel Morales (50:37):

This podcast was created by Kate Cooney in collaboration with James Johnson-Piett and the students of the Spring 2021 Lab.

Eun Sun Cho (50:45):

All engineering and production by Ryan McAvoy and Kate Cooney.

Kate Cooney (50:50):

Special thanks to Rhona Ceppos for administrative support and to Ryan Carpenter for assistance with Zoom.

Eun Sun Cho (50:57):

Music from the album City Trees, composed and performed by the artist K-Dub.

Manuel Morales (51:01):

For more information and show notes, visit our website at IEDL.yale.edu.

Eun Sun Cho (51:08):

Thank you for listening.

[Music]