« Who's To Blame For Inequality? | Main | On Hagel »

August 21, 2006

Why Immigrants Run Bodegas

After Andrew Young criticized immigrant-run "mom-and-pop" shops for exploiting blacks, a bit of a hubbub erupted over the possible bigotry of his comments. He argued that these races were exploiting blacks, who didn't, you'll notice, seem to own any of the stores. Steven Teles, however, disputes that this is a racial issue:

let's take three categories of small businesses that immigrants tend to concentrate on: corner shops, dry cleaners, and doughnut shops. What do all these have in common? First, they are very low margin enterprises. They are only profitable if you can drive hourly wages down very low. This is possible if you engage in what I call (and refer to in my co-edited book called Ethnicity, Social Mobility and Public Policy in the US and UK, available to your left) "self-exploitation." These are enterprises that work mainly if you can make yourself and your family the labor pool, and make up for low average hourly wages with extremely long hours, both on the part of the owner and their family (whose labor is not directly compensated and not taxed).

These type of enterprises don't work for African-Americans for two reasons. First, their reserve wage is above the (very low) effective hourly wage that these enterprises provide. Second, given their family structure, most African-Americans don't have recourse to uncompensated family labor. There's also a third factor, which is access to capital--many of these enterprises are originally capitalized through rotating capital arrangements, which depend on the high level of social trust that comes from fairly tight-knit immigrant communities. A more speculative fourth factor is that these enterprises often work because consumption among the relevant immigrant groups is often highly suppressed--closer to the level of their countries of origin than the US norm.

That said, bodegas really are terrible ways to get your groceries. I lived next door to one for awhile and the fruit was continually rotten, the milk often spoiled, the cereal overpriced and near expiration, and the healthful options nonexistent. That they survive at all is not a commentary on immigrant greed but on the lack of decent supermarkets and food suppliers willing to open into impoverished areas.

August 21, 2006 | Permalink

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c572d53ef00d834aaf2c653ef

Listed below are links to weblogs that reference Why Immigrants Run Bodegas:

Comments

"That said, bodegas really are terrible ways to get your groceries. I lived next door to one for awhile and the fruit was continually rotten, the milk often spoiled, the cereal overpriced and near expiration, and the healthful options nonexistent. That they survive at all is not a commentary on immigrant greed but on the lack of decent supermarkets and food suppliers willing to open into impoverished areas. "

This hits the nail on the head.

As to the racial issue, there is a tendency in the AA community to sometimes want to blame other minorities that I often have to fight. Unfortunately we aren't immune to same crap that infects the majority when it comes to immigrants.

Posted by: akaison | Aug 21, 2006 11:29:32 AM

the cereal overpriced and near expiration

Cereal has a sell by date?

Posted by: Vladi G | Aug 21, 2006 11:38:17 AM

If you go to a Puerto Rican bodega, you're going to get what Puerto Ricans eat- no emphasis on freshness, not much in the way of vegetables or fruit, lots of baked goods made of white flour, sugar, and lard. This is a cultural issue, not a class one.

Posted by: PDJones | Aug 21, 2006 11:41:13 AM

Another reason the selection at many bodegas is so poor is that these retailers often do not have sufficient capital or credit to work with higher quality distributors. They must pay on delivery, so they need to purchase only what is going to turn quickly or doesn't carry high storage costs (refrigeration, freezer).

Posted by: CParis | Aug 21, 2006 11:47:25 AM

These type of enterprises don't work for African-Americans for two reasons. First, their reserve wage is above the (very low) effective hourly wage that these enterprises provide. Second, given their family structure, most African-Americans don't have recourse to uncompensated family labor. There's also a third factor, which is access to capital--many of these enterprises are originally capitalized through rotating capital arrangements, which depend on the high level of social trust that comes from fairly tight-knit immigrant communities.

Yes, the culture is different and this is really a cultural issue as are most "racial" issues. Blacks are simply not willing to do what these people do and the culture doesn't have the social controls to allow the trust, etc.

Thinking that we are all alike 'under the skin' is a philosophy that will leave you wanting.

Posted by: Fred Jones | Aug 21, 2006 12:05:50 PM

When I worked in health care, we routinely treated young Indian/Pakistani men for exhaustion, stress related illness and severe depression. All of these young men were trying to run businesses themselves on the cheap (usually motels). They often refused to hire help, and had their wives and children doing regular work like cleaning rooms and washing. They were difficult cases, as that they always seemed to feel like they had no other option than to go straight back into the exact same situation that was running them ragged in the first place.

Posted by: sprocket | Aug 21, 2006 12:30:14 PM

And now we hear from our resident racist Fred. Please oh Please, fred tell me what I as a black guy am and am not willing to do- because you know my group so much better than I do. And before you talk, realize that a lot of us are bootstrappers- if you don't know what that concept is go look it up. And lets really talk about this on a brass level- why should anyone after several hundred fucking years of being in this country have still 'work their way up'? or is that an inconvient truth.

Posted by: akaison | Aug 21, 2006 12:42:05 PM

PS

I have a question- why are out and out racist comments like those posted by Fred tolerated here? It's one thing if they debate actual arguments, but his comments are out and out racists statements about 'all blacks' among other things. Anywhere else this would be considered troll worthy. There is a difference between being conservative and what Capt Toke, Fred and Ron G represent.

Posted by: akaison | Aug 21, 2006 12:43:45 PM

Not every bodega is poorly run, or has bad products. I usually only go into Asian groceries, since that's where my tastes lie, but when I've gone to the Hispanic or Middle Eastern groceries for items I have found them to be pretty nice, whether I'm in KC, Phoenix or the East Bay.

Posted by: Stephen | Aug 21, 2006 12:44:32 PM

I took a business school class on running a small business, and they taught exactly what Steven Tales suggests: Employ family, not only to get around labor laws, but also to get health insurance for your family tax-free. The potential small business owner was encouraged to put the Corporation in the non-working spouse's name (despite the divorce risks that entails), have the spouse offer a company-paid health plan to the true business owner as an employee to take advantage of the tax break. Since employee health plans then cover spouses and children at a nominal additional rate, the whole family gets coverage on the house, so to speak.

The prof also noted correctly that immigrant groups tend to be more family-oriented than American-born counterparts, and cousins, aunts, uncles, nieces and so forth are willing to work for longer hours and lower wages.

Posted by: Rick | Aug 21, 2006 12:59:04 PM

I'm kind of surprised that no one made this observation ... that running a lot of these enterprises requires being a workaholic and accepting modest living standards. Good to see someone beat me to the punch.

Posted by: Nicholas Beaudrot | Aug 21, 2006 1:00:37 PM

"That they survive at all is not a commentary on immigrant greed but on the lack of decent supermarkets and food suppliers willing to open into impoverished areas."

Which is apparently a function of higher real estate cost (yes, real estate in urban ghettos is still more expensive than the suburbs), higher crime prevention/insurance costs, a lack of business intelligence about the purchasing habits of the working class, and the difficulty of selling more high margin items—most grocery stores are essentially non-profits that fund themselves by selling wine, cuts of beef, and non-food items like cleaning supplies and batteries that can stay on the shelf forever.

Giuliani and Bloomberg have made big pushes to get full-service grocery stores into many areas, which along with crime has helped make New York liveable again.

Posted by: Nicholas Beaudrot | Aug 21, 2006 1:04:21 PM

Not all bodegas suck -- the one on the corner of my block is expensive, but not egregious, and the food's no worse than at the nearest grocery store. I like having milk and coffee a 90 second walk from my front door.

(But this is entirely irrelevant to the meaning of the post. I just felt like defending the guys I buy milk from.)

Posted by: LizardBreath | Aug 21, 2006 1:04:55 PM

As Fred's comments show (and he obviously did not read the whole click-through), the summary here is somewhat lacking.

It's not that blacks don't run these stores, but most other ethnic groups don't either - only first-generation immigrants do. White Christians, or second-generation immigrants (ie, the children of the original owners) generally don't bother to run these stores because they have become more accustomed to the American standard of living. Why anyone doesn't work 14 hour days for $5 an hour and push their kids into doing so as well should NOT be a question our punditocracy keeps asking one particular race (ie, black people).

Similarly, the "mom and pop" stores in middle-america getting bulldozed by WalMart would do fine if they just cut margins and chose to pay themselves the same wages that these bodegas do, and for obvious reasons they choose not to take that quality of life hit.

Posted by: Tony v | Aug 21, 2006 1:33:53 PM

tony

i believe peo like fred see blacks as not 'american' so he feels fully justified in his rather stupid comments of comparing peo who have been here for generations with those who have just gotten here.

Posted by: akaison | Aug 21, 2006 1:50:12 PM

Well put. Possible additional factors for why so few African-Americans run bodegas and comparable mom-n-pop stores include:

(1) Negative discriminatory aspects on access to capital - while immigrant groups might have positive advantages relevant for access to initial capital, many urban African-Americans confront considerable disadvantages

(2) Negative discriminatory experiences - many times shopping in such places with African-American friends, they were checked, scrutinized, or otherwise treated differently than I was, merely due to skin color. Widescale negative experiences in such businesses might pose a disincentive for many African-Americans to enter the same business.

Posted by: donovan | Aug 21, 2006 2:40:58 PM

I have a question- why are out and out racist comments like those posted by Fred tolerated here?

Seconded.

I've lurked here quite a while. It's been a long time since I've seen Fred say anything that wasn't either pointless, homophobic, or blatantly racist.

He also seems to be a bit too fond of the "have sex with one goat" joke whenever gay identity comes up as an issue. Implications of bestiality aside, it comes across as kind of unwarranted and bizarre. Haunted by something in your past, Fred?

Posted by: Thomas | Aug 21, 2006 2:47:03 PM

Heh.

When Steven Teles writes it and Ezra Klein posts it, it's somehow OK. However, when I agree with them, akaison comes all unglued.

If you can't discuss these issues without your own problems getting in the way, then don't.

Posted by: Fred Jones | Aug 21, 2006 2:59:52 PM

Blacks are simply not willing to do what these people do and the culture doesn't have the social controls to allow the trust, etc.

Fred, that's a racist statement. It's indefensible. That's the problem we have with it, not just because it's from you. If you were capable of making a statement agreeing with Ezra, or anyone else for that matter, without including your bigotry, there would be no problem.

I'm getting tired of all the "meta" comments about trolls, since they are threadjacking as well. But I agree that some people are not merely disagreeing or trying to get reactions from people; they are making hateful, racist statements. It needs to stop.

Posted by: Stephen | Aug 21, 2006 3:12:05 PM

I'm in the "bodegas not necessarily bad" camp. The one by my house even has decent sushi.

Posted by: tps12 | Aug 21, 2006 3:57:00 PM

As you chose to ignore my previous statements and make this what you really wanted instead of what it is, then simply substitute "black culture".

And if you can't talk about the characteristics of the black culture, then it's your problem and not mine.

Posted by: Fred Jones | Aug 21, 2006 4:18:27 PM

Bodega is just a kewl werd tho. I would totally go to 1 just because of that, 4 sure. LOL.

Posted by: Adrock | Aug 21, 2006 5:02:03 PM

Silly us to think that vast generalizations about a group of people based upon their racial makeup are what's called racism. Even sillier of us to think such statements ought be tolerated.

Posted by: Adrock | Aug 21, 2006 5:13:06 PM

the quality of a bodega like everything else in american is directly proportional to the class of neighborhood you are in. If you live in East NY in Brooklyn, they probably suck, and if you are somewhere near Central Park East, they are probably great.

Posted by: akaison | Aug 21, 2006 5:22:08 PM

I guess bodegas mean different things in different areas.

In Oakland, they are really just liquor stores, places that sell alcohol and some necessities. A friend of mine spent a summer collecting data related to liquor stores and crime rates for the city government. It is a problem.

The food oriented, immigrant owned businesses are either asian groceries or granolaish organic corner stores. Presumably, the relative margins on each fit their target markets. I'll probably be moving my shopping to the Whole Foods they are building a few blocks away.

Posted by: talboito | Aug 21, 2006 6:29:23 PM

The comments to this entry are closed.