A surge of state unemployment claims by Asian Americans in Minnesota is raising alarms about the survival of Asian-owned family businesses in the pandemic. The filings come at the same time people of Asian heritage are targets of bigoted abuse tied to COVID-19.
The pandemic has changed the character of Little Mekong, a business district near the Capitol in St. Paul. About 40 years ago, southeast Asian refugees settled in and started revitalizing the once-struggling area, said Va-Megn Thoj, executive director of the Asian Economic Development Association.
Lately, it’s been jarring for Thoj to see so many mom-and-pop businesses along the stretch of University Avenue temporarily shuttered.
"Little Mekong is a destination for Asian businesses and restaurants and culture, and so we're really concerned that the Little Mekong district could disappear because of COVID-19,” he said.
One of the affected entrepreneurs is Ericka Trinh. She’s also one of the more than 34,000 Asian Minnesotans who have filed for unemployment benefits during the pandemic.
During normal times, she'd get up early, bake for a few hours at one of her businesses, Silhouette Bakery and Bistro in St. Paul, and then get to work at her other business, Anh’s Hairstylists. She'd typically log about 12 hours a day, six days a week.
Suddenly, she was forced to stay home and temporarily close the salon and reduce hours at the bakery during Minnesota's peacetime emergency.
Trinh went about a month without her regular income, using up savings to pay her bills. At first, she didn’t know she qualified for unemployment benefits as a business owner.
“Some people told me that we do qualify for unemployment now, so I started looking into that and applied both my mom and I to receive it,” she said. “We didn't actually get it until a couple weeks ago, which was about a month after we were forced to close."
State officials say they’ll unveil a plan Wednesday that will let people back into bars, restaurants, beauty salons and other gathering places by June.
Steve Grove, the state’s commissioner of employment and economic development, wrote on Twitter that state leaders will unveil “phased plans” for those high-traffic venues, which have taken a huge economic hit during the pandemic.
Job losses fall hard on people of color
Although COVID-19 has caused widespread economic harm, researchers with Minnesota Compass say the damage isn't evenly felt among everyone in Minnesota.
Black Minnesotans and Native Americans appear to be the hardest hit with job loss.
Data released Tuesday show that about 24 percent of Minnesota's Asian workforce have applied for unemployment benefits, compared to the state average of about 22 percent.
But Asian Americans in Minnesota are seeing the greatest growth in unemployment claims.
In April 2019, about 300 Minnesotans of Asian descent claimed unemployment. One year later, the number of claims in April skyrocketed to more than 18,000, according to state figures released Tuesday.
“The research that we have shows that women and communities of color are more likely to be working in jobs such as child care, retail, restaurant and food services,” said Ellen Wolter, research scientist with Wilder Research, who works with a team compiling this data. “These are the jobs and industries that have been severely impacted by the COVID-19 pandemic.”
For those reasons, Thoj, whose organization supports small, Asian-owned businesses with loans and business development, said the economic hardship experienced by Asian Americans is not surprising.
Bruce Corrie, a professor of economics at Concordia University in St. Paul, said many Asian Minnesotans own their own businesses and have survived past recessions. The pandemic may have forced them to seek benefits this year.
"One reason they have managed to survive over time is because it's a family-owned business, and the family took the shock of anything that hit them,” Corrie said.
Researchers say policymakers should think about the heavy impact on the Asian community as they consider relief response.
The Asian Minnesotan economy generates $1 billion in tax payments, and thousands of businesses provide more than $700 million in payroll, Corrie said.
“When we look at the national Asian American economy, it is almost the size of Pennsylvania,” he said. “Unless we do something about it, we would be in trouble."
Corrie said it's also important to recognize the economic progress that Minnesota's Hmong community has made in home ownership — about 50 percent of community members now own homes — which is being threatened by the economic downfall from the pandemic.