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Ethnic enclaves and niches

Migration A–Z


  1. Min Zhou

Published Online: 4 FEB 2013

DOI: 10.1002/9781444351071.wbeghm201

The Encyclopedia of Global Human Migration

The Encyclopedia of Global Human Migration

How to Cite

Zhou, M. 2013. Ethnic enclaves and niches. The Encyclopedia of Global Human Migration. .

Publication History

  1. Published Online: 4 FEB 2013

Ethnic enclaves are urban neighborhoods in which immigrant groups or ethnic minorities are residentially concentrated, while ethnic niches are where particular types of businesses are disproportionately owned and/or staffed by ethnic minorities. Many ethnic enclaves seem to be unambiguously identified by the name associated with a sending country, such as Little Italy, Little Tokyo, Koreatown, Little India, and Thaitown, while others are known by the name of a neighborhood, such as Pico Union of Los Angeles (a Latino enclave) or New Orleans East (a Vietnamese enclave).

Social scientists distinguish an ethnic enclave from an urban neighborhood in analytical terms, especially in their research on immigrant communities and ethnic entrepreneurship. An urban neighborhood comprises not one but multiple ethnic enclaves, while an ethnic enclave is structured not only by ethnicity but also by group-level socioeconomic characteristics. Thus, ethnic enclaves located in the same neighborhood are often unequal. Los Angeles's Koreatown is illustrative. Koreatown started in a multiethnic neighborhood in downtown Los Angeles, and has never been dominated by Korean co-ethnics despite its name. In 2000 Koreans made up only 18 percent of Koreatown's population and other Asians and Latinos 11 percent and 57 percent, respectively. Minority dominance in the inner city is due to the out-movement of the white middle class, or “white flight,” and the massive influx of Asian and Latin American immigrants. Los Angeles is not unique in this respect as many major cities in the US have experienced such neighborhood change. In the case of immigrants (the foreign-born in Koreatown made up 69% of the total), the trend of neighborhood change implies that even though they rub shoulders with members of other ethnic groups they are unlikely to build community across ethnic lines because language and cultural barriers can become mechanisms for exclusion at the local level. Hence, being in the same place may not necessarily mean belonging to the same community.

Ethnic neighborhoods in the inner city are also characteristic of low socioeconomic status, and many suffer from ghettoization. In terms of its low levels of education and income and high concentration of poverty, Koreatown reflects these structural disadvantages. According to the 2000 census, 43 percent of residents in Koreatown had not completed a high school education, a significantly lower percentage than Los Angeles County's average (30%); the unemployment rate was 12 percent, more than twice as high as the county's average (5%); median household income was US$22,000, much lower than the county's average ($42,200); and poverty rates were extremely high, at 31 percent, compared to 15 percent for the county as a whole. However, not all ethnic enclaves suffer from the same fate of neighborhood deterioration. Ethnic groups with higher than average socioeconomic status and resources upon arrival can build ethnic communities or strengthen existing ones even in decaying urban neighborhoods.

Koreatown has witnessed a remarkable economic revival and growth fueled by Korean entrepreneurship and foreign investment from Korea. Even after the 1992 civil unrest which nearly devastated the Korean community, Korean-owned businesses have made a strong comeback. At the turn of the 21st century, there is a wide range of small- to medium-sized retail businesses with visible Korean language signs along the commercial corridors of Koreatown, including upmarket restaurants, fancy shopping malls, and stylish health spas and beauty salons, a scene rarely found in other inner-city neighborhoods. Two major shopping malls in Koreatown – Koreatown Plaza and Koreatown Galleria – resemble some of the trendiest shopping centers in Asia. Upscale retail tends to cater to multiethnic professionals during weekdays while attracting predominantly suburban middle-class Koreans and their families at weekends. Koreatown also has numerous professional establishments, including bookstores with ethnic music, videos, periodicals, and newspapers; herbal medicine clinics and doctors’, acupuncturists’, and dentists’ practices; legal offices; financial and insurance institutions and real estate companies; travel agencies; training and learning centers; as well as private after-schools. A most distinctive feature is its ethnic retail combined with a recreational entertainment industry featuring a colorful nightlife, a range of health spas, and a focus on golfing. There are three indoor golf ranges in Koreatown, accommodating the golf craze which has become fashionable in Asian countries since the early 1990s. There are also numerous trendy, stylish, and neon-lit nightclubs, karaoke bars, pool halls, and video-game stores catering to Koreans from the suburb and Korean young people from nearby colleges. Another distinctive feature of Koreatown is the high density of Korean churches, professional associations, and after-school tutoring and academic preparation programs for children. This particular combination of co-ethnic businesses and cultural institutions forms a magnet for attracting suburban middle-class co-ethnics who have moved out of the area. In turn, low-income Korean residents living in Koreatown benefit from an ethnic enclave endowed with ample economic and institutional resources generated by co-ethnics who live elsewhere but frequently return to it for work, leisure, and other cultural activities and from ongoing social relations with resourceful middle-class co-ethnics. This is not the case for Latino residents living in the same neighborhood.

Ethnic enclaves and ethnic niches are two important concepts in research on ethnic entrepreneurship. The literature distinguishes two main types of ethnic entrepreneurs: middleman minorities and enclave entrepreneurs. Middleman minorities are ethnic entrepreneurs who occupy particular occupational or industrial niches to trade between a society's elite and its masses. Historically, they were sojourners, interested in making a quick profit from their portable businesses which were easily convertible into liquid assets and then reinvesting their money elsewhere, which often implied a return home (Bonacich 1973). Therefore, they most commonly established business niches in urban neighborhoods deserted by mainstream retail and service industries or by business owners of a society's dominant group and dominated by poor immigrant or native minorities. Middleman-minority entrepreneurs have few intrinsic ties to the social structures and social relations of the local community in which they conduct economic activities and are thus vulnerable to interethnic hostility and conflict. Enclave entrepreneurs, in contrast, include mainly those who are bounded by co-ethnicity, co-ethnic social structures, and location. In the past, they typically operated businesses in urban neighborhoods where their co-ethnic group members dominated and they themselves were also intertwined in an intricate system of co-ethnic social networks within a self-sustaining ethnic enclave. At present, many ethnic entrepreneurs can play the role of middleman-minority entrepreneurs and of enclave entrepreneurs simultaneously. For example, a Korean immigrant running a business in Koreatown is an enclave entrepreneur relative to his or her Korean co-ethnics who live there. At the same time, to the Latino residents who make up the majority of the neighborhood, he or she is just one of many middleman-minority entrepreneurs.

The analytical distinction thus becomes sociologically meaningful as economic transactions of these two types of ethnic entrepreneurs are conditioned by different social structures and social relations. For example, the stony-faced Korean shop owner in Koreatown may be interpreted as hostile and even racist by his or her Latino customers, and the effect can be exacerbated by a lack of proficiency in English. But the same face is accepted matter-of-factly by Koreans in Koreatown where a common language often eases potential anxiety and hostility. Furthermore, there is a high probability that the Korean owner and his or her co-ethnic customers belong to the same church and/or the same ethnic organizations in Koreatown (Zhou 2004).

The literature on ethnic entrepreneurship also distinguishes between two relevant concepts: the ethnic economy and the enclave economy. The ethnic economy broadly includes any immigrant or ethnic group's self-employed, employers, and co-ethnic employees who are concentrated in particular occupational or industrial niches. There are two key characteristics of the concept: one is the ethnic group's maintenance of “a controlling ownership stake” and its co-ethnic labor force or unpaid family labor; and the other is the ethnic group's control over the employment network, which allows the channeling of co-ethnic members into non-coethnic firms and even into the public sector of the larger labor market (Light & Karageorgis 1994: 648). The concept of the ethnic economy, with its dual characteristics of co-ethnic ownership and employment network, is thus a neutral designation for every enterprise that is owned, supervised, or staffed by racial or ethnic minority group members regardless of size, type, and locational clustering. It is also agnostic about the intensity of ethnicity, neither requiring nor assuming “an ethnic cultural ambience within the firm or among sellers and buyers” (Light & Karageorgis 1994: 649). The ethnic economy thus encompasses businesses owned by middleman minorities, businesses owned by co-ethnics in ethnic enclaves, as well as all ethnically owned or ethnically controlled enterprises in the general economy. Under this concept, the groups that are known to have higher than average rates of self-employment, such as Jews, Japanese, Koreans, Chinese, Iranians, and Cubans, have their respective ethnic economies; the groups that are known to have low self-employment rates but control recruitment networks in certain industries in non-coethnic firms and even in the public sector, such as blacks, Mexicans, and Salvadorans, also have their own ethnic economies. Such a broad conception makes operationalization convenient, especially when various sources of secondary data are used. For example, the ethnic economy may be operationalized by either a co-ethnicity of owners and coworkers or a co-ethnicity of supervisors and coworkers. It may also be measured by the degree of industrial or occupational niching (Waldinger 1994).

The enclave economy is a special case of the ethnic economy, one that is bounded by co-ethnicity and location. Not every group's ethnic economy can be called an enclave economy. In its original conceptualization, the enclave economy had a structural and a cultural component. Unlike the ethnic economy concept, which includes almost every business under an ethnic umbrella, the enclave economy has several unique characteristics. First, the group involved has a sizable entrepreneurial class. Second, economic activities are not exclusively commercial, but include productive activities directed toward the general consumer market. Third, the business clustering entails a high level of diversity including not just niches shunned by natives but also a wide variety of economic activities common in the general economy such as professional services and production. Fourth, co-ethnicity epitomizes the relationships between owners and workers and, to a lesser extent, between patrons and clients. Last and perhaps most importantly, the enclave economy requires a physical concentration within an ethnically identifiable neighborhood with a minimum level of institutional completeness. Ethnic businesses, especially in their early stages of development, have a need for proximity to a co-ethnic clientele which they initially serve; a need for proximity to ethnic resources, including access to credit, information, and other sources of support; and a need for ethnic labor supplies (Portes & Manning 1986).

The enclave economy also has an integrated cultural component. Economic activities are governed by bounded solidarity and enforceable trust – mechanisms of support and control necessary for economic life in the community and for reinforcement of norms and values and sanctioning of socially disapproved behavior. Relationships between co-ethnic owners and workers, as well as customers, generally transcend a contractual monetary bond and are based on a commonly accepted norm of reciprocity (Zhou 1992).

In sum, the enclave economy is not just any type of ethnic economy. The term “enclave” does not just evoke the concept of an ethnic economy, but refers to a specific phenomenon, which is bounded by an identifiable ethnic community and embedded in a system of community-based co-ethnic social relations and observable institutions. Central to the concept of the enclave economy is the idea that the ethnic enclave is more than just a shelter for the disadvantaged who are forced to take on self-employment or marginal wage work in a small business; rather, the ethnic enclave possesses the potential to develop a distinctive structure of economic opportunities as an effective alternative path for social mobility.

References and Further Reading

  1. Top of page
  2. References and Further Reading
  • Bonacich, E. (1973) A theory of middleman minorities. American Sociological Review 38, 583594.
  • Light, I. & Karageorgis, S. (1994) The ethnic economy. In N. J. Smelser & R. Swedberg (eds.), The Handbook of Economic Sociology. Princeton: Princeton University Press, pp. 647669.
  • Portes, A. & Manning, R. D. (1986) The immigrant enclave: theory and empirical examples. In S. Olzak & J. Nagel (eds.), Comparative Ethnic Relations. Orlando, FL: Academic Press, pp. 4768.
  • Waldinger, R. (1994) The making of an immigrant niche. International Migration Review 28, 330.
  • Zhou, Min (1992) Chinatown: The Socioeconomic Potential of an Urban Enclave. Philadelphia: Temple University Press.
  • Zhou, Min (2004) Revisiting ethnic entrepreneurship: convergences, controversies, and conceptual advancements. International Migration Review 38, 10401074.