Because of the COVID-19 pandemic, a significant portion of Asian American–owned businesses in Southern California had, by April 2021, experienced financial losses, closures and staff reductions, and many of them struggled to access local, state or federal local aid, according to a new UCLA policy brief.
The brief is based on data from a survey conducted during the first four months of 2021 by the Asian Business Association of Los Angeles, whose findings were published by the Asian Business Center, the UCLA Center for Neighborhood Knowledge and the UCLA Asian American Studies Center.
The Asian American Studies Center, which received funding from the state of California to support research on pandemic recovery efforts, provided key insights for the brief as part of its Asian American Policy Initiative.
Researchers asked 400 Asian American business owners in Southern California about the impact of the pandemic. Businesses represented a variety of industries, including manufacturing, retail, transportation, professional services, restaurants, services and health care.
Roughly 60% of respondents reported a large negative effect from the pandemic. By comparison, in the U.S. Census Bureau’s January Small Business Pulse Survey, less than 40% of all California businesses reported a large negative effect from the pandemic. Although the timeframes for the two reports were different, the survey was modeled on the census bureau questionnaire for consistency.
In the Asian Business Association survey, nearly one-third of Asian American–owned businesses reported that their operating capacity decreased by more than 50%; in the census bureau survey; the comparable figure was just over 20% for all California businesses. Operating capacity — a measure of the maximum amount of activity a business could conduct under realistic operating conditions — was influenced during the pandemic by companies’ ability to hire, provide protective supplies for employees, enforce physical distancing and convert to selling goods and services online.
“While some companies were able to minimize their losses by pivoting to online sales, owners who are older reported that they struggled to make that transition,” said Paul Ong, a UCLA research professor and director of the Center for Neighborhood Knowledge. “On the other hand, younger business owners said they faced eligibility barriers when they tried to access recovery funds that would help their companies survive.”
According to the survey, Asian American businesses applied to and received Paycheck Protection Program assistance at lower rates than California businesses overall. Among the reasons were respondents’ struggles with language barriers and a lack of information and effective guidance from public entities. Many business owners also reported that they had been waitlisted for aid.
According to the census bureau’s survey, about 74% of all California businesses received paycheck protection aid, but the Asian Business Association survey found that just 63% of local Asian American–owned businesses received such benefits.
“Nearly all of the businesses in our sample are small businesses, operating with fewer than 20 employees,” Ong said. “And most businesses we surveyed have no more than four employees including the owner. These are precisely the people that aid programs are meant to help, and they are struggling to get that aid.”
The policy brief recommends that policymakers simplify the financial relief application process for business owners, work with community organizations to provide additional technical assistance for business owners and do more to track the health of Asian American–owned businesses during the continued recovery from the pandemic.
Three out of four of the businesses surveyed were immigrant-owned and nearly half were owned by women. Half of business owners were between the ages of 35 and 54, and about one-third were 55 or older. People of Chinese, Filipino, Japanese, Korean and Vietnamese descent made up the largest portion of the survey.