I save a lot of stuff on my computer.  I was looking for something else and found this.

Koreans find solidarity, hard work paves way to
business success:  Blacks angered,
baffled as capital eludes them

BYLINE: By Arthur Brice STAFF WRITER
DATE: 07-19-1992
PUBLICATION: The Atlanta
Journal and Constitution

When Perry Liquors store owners Jung-Woo Mun and his wife, Myung, needed some quick cash for repairs to their blue cinder-block building, they didn't go down to the nearest Wachovia or Bank South.  They asked a Korean friend for $5,000. No paperwork. No hassles.  Just a handshake.

 That's how it works in the Korean-American community. They take care of each other. That cooperation - along with high education levels and a strong work ethic - is one of the main reasons Korean immigrants are the most successful ethnic group in the American business world.  But that success has exacted a price, particularly in African-American communities in Atlanta, Los Angeles and other large U.S. cities where angry blacks looted Korean businesses after the Rodney King beating verdict.

 Many blacks express dismay and anger over how Koreans, quite a few of whom just arrived and know little or no English, can succeed while African-Americans seemingly can't. And what makes it even more bitter for millions of blacks is that they must confront that discrepancy every day because many Korean-owned businesses are located in African-American neighborhoods.

 "It makes comparisons and conclusions about who is doing business in the African-American community rather inescapable," said Earl Shinhoster, Southeast regional director for the National Association for the Advancement of Colored People.

 The latest available U.S. Census figures bear out the vast differences: While more than one of every 10 Korean-Americans owns a business, blacks own about 1.5 businesses for every 100 residents.  The Korean success story is duplicated in the Atlanta area, where they own more
than 500 businesses. Although the 1990 Census identifies 15,275 Koreans in
Georgia, the Southern Center for International Studies estimates that about
25,000 Koreans live in metro Atlanta, placing them among the fastest-growing ethnic groups.

 Many Koreans point to their hard work and willingness to help each other as reasons for their success, just as many blacks point to their inability to obtain start-up capital from lending institutions as reason for their dismal success rate. It's more complex than that, but there's truth on both sides.

 "If Koreans have an advantage over other ethnic groups, it's that families are willing to work together," said Nack Paek, owner of Government
Loan Service Corp. and chairman of Summit Bank Corp. "Many times in a
marginal business, a Korean buys it . . . and is able to eliminate salaries.
That works to their advantage."  But Lyndon Wade, president of the Atlanta
affiliate of the Urban League, sees a racist system impeding blacks.

 "It's a great mystery to many black people as to how the Koreans are able to marshal the capital to be able to buy these ventures and make them work," Mr. Wade said. "They know that as citizens they have been frozen out of the capital market. Access to the capital market continues to be very elusive."

 Obtaining capital

 Joseph Lowery, head of the Southern Christian Leadership Conference, agrees that money makes the difference.  "We have to find out how they get
capital so we can do it," said the civil rights leader.  "There's no mystery there at all," counters Mr. Paek, whose business helps many Koreans
obtain Small Business Administration loans.  Koreans, he said, receive no preferential treatment. They must meet the same credit criteria as other borrowers. Hyun-Gon Kim, the South Korean consul general in Atlanta, adds that Koreans can get loans because they have a history of paying them back.  "If banks feel confident loaning money to certain individuals, then they'll make the loan," said Glenn Park, whose father owns the Five Star Super Market on the Atlanta University campus.  But many Koreans do have an advantage because they don't have to rely on loans from traditional sources. More than a few recent arrivals have large sums of money earned from a booming real estate market back home.  "In the old days," Mr. Paek said, "a husband and wife would work as laborers at the factory or at the convenience store, they would accumulate cash and get enough money to go out and buy a business. But nowadays, Koreans coming from Korea -- they're rich people. Real estate is skyrocketing."

 Pooling resources

 Even Koreans without accumulated wealth can skirt having to rely on banks or governmental agencies such as the SBA for start-up capital. Some use loans from family, friends and church members.  Others also rely on a lending system called a gae (pronounced geh).  In a gae, a group of people each put a set amount - say $1,000 - into a pool every month for a determined period of time, usually 12 or 18 months. Each month, a different person can take the pool.  Anyone who has drawn the pot must pay a little more than the preset amount each subsequent month as a form of interest payment.

David Kang relied on $10,000 from a gae as well as a $5,000 loan from a Korean friend, $15,000 from a business dispute settlement and $7,000 from a life insurance policy to buy a convenience store on Jonesboro Road
earlier this year.  "How many people have good credit when they come out of a foreign country?" Mr. Kang asked.  "We are the foreign people here. We can only trust each other."

Blacks, on the other hand, seem to lack that built-in network.
Investigations, including those conducted by the Atlanta Journal-Constitution, also have shown that African-Americans continue to have
difficulty obtaining money from lending institutions.  The answer, some black businessmen say, must come from within the African-American community.  "The Koreans aren't coming in and taking over our neighborhoods. We're giving them our neighborhoods," said La-Van
Hawkins, a franchise holder for 10 Checkers fast-food restaurants in Atlanta.  "Nobody's going to give that to us," Mr. Hawkins said. "We can't rely on anyone. We've got to do it ourselves, and it hasn't been done. And until we do that, there's always going to be a symptom."

 Impeding blacks

 But there's an even more potent impediment, some analysts say.  "For most of their history, blacks have been precluded from going  into business or strongly discouraged," said William O'Hare, director of the Population and Policy Research Program at the University of
Louisville. "And so there's no business tradition within black families."
Instead, Mr. O'Hare said, educated blacks have been guided toward public
service - teaching, the ministry, government work. Economic conditions also
have played a role.  "You can take a job for the city of Atlanta or you can gamble and buy a little corner store and see how it does,'' Mr. O'Hare said. "Particularly given how precarious the black economic situation has been in this country, it's not hard to imagine they'd take the security of a government job."

And while blacks have shied away from business ownership, Koreans often take that path because language problems prevent them from getting high-salary jobs.  "If there are blacks and Koreans of the same education level," Mr. O'Hare said, "a black will probably have access to a well-paying government or private sector job, but a Korean wouldn't."

 

graph:
Koreans lead
 
Koreans are the minority group most likely to own a business. Here's a  national sampling
showing minority-owned firms per 1000 people.

 ..............1982....1987

 
Black...........11......15
Mexican.........14......21
Chinese.........49......63

Korean..........68.....102

Native American..7......10