For Korean Shopkeepers, Unrest Dims Prospects Success
SOUTH CENTRAL LOS ANGELES — IN a vast warehouse called "Swap Meet" on West Venice Boulevard in Los Angeles, dozens of Korean merchants have set up booths to sell their wares. The communal hall is one of many around the city where Koreans lease a small amount of space, and fill every available inch with goods they buy at wholesale prices.
"This is the first stop for many Koreans who don't come to the United States with a lot of capital," says Paul Hudson, president of Broadway Federal Savings Bank, whose institution shares a big parking lot with the Swap Meet. "The question is, can they graduate from here?"
Mr. Hudson, whose family-owned bank was founded in 1946, caters to a mixed black and Latino customer base, reflecting the city's growing number of immigrants from Central and South America. Koreans, he says, are the tightest minority community in the area.
Unlike other minorities that tend to transact with banks, many Koreans prefer their own well-developed informal financial network - the "kye" system, a rotating credit union that draws in family and friends.
If 10 people get together every month and put $10,000 in the pot, one person can take out $100,000. In these times of tight credit, it has been an excellent source of financing.
Swap Meet booth owners who do well often rely on that money, says T. S. Chung, a lawyer who represents a host of Korean-owned businesses in the US.
From their small booths, Mr. Chung says, some Koreans have charted a successful course by moving to big regional shopping malls, and then on to become wholesalers, distributors, and manufacturers.
He estimates that out of the roughly 400,000 Korean Americans who reside in Orange County and Los Angeles, "close to 20 percent are self-employed business people - 90 percent of whom are small, with sales under $1 million."
At the West Venice Swap Meet, where two armed guards greet customers at the entrance, prospects for that kind of success are bleak. Inside, sneakers dangle from poles, clothing hangs from rafters, tables are jammed with electronics, and jewelry is displayed in simple glass cases. From booth to booth, proprietors say business is bad.
In the center is Choi Smith, who sell children's clothing. Like many Korean small entrepreneurs, her start-up capital came from family in back Korea. On a good day, she says, she may get 10 customers who actually buy something.
Much of her stock is stolen, she says, and gang members are her most frequent customers. "I'm used to shoplifting now. I just don't want to get hurt."
The Swap Meet was looted and vandalized during last April's riots, and many owners expect more unrest to follow the ongoing trial.
"Before we had 60 booths in here, now there are 42. People move. They give up. They're scared," says Ms. Smith. "I'm disappointed here, because I had a lot of dreams - a better education, a peaceful place for my children. I thought if I worked hard, I could make more money."
Today, Smith says she is $2,000 in debt each month, unable to move merchandise fast enough to cover her rent, utility, and loan costs.
While Koreans are commercially engaged in South Central, Chung says, few are residents. "They wouldn't want to live there. They want to live and sleep in peace." [Many live in safer suburbs or, for those who can afford it, in affluent Orange County.]
And Hudson says that while Koreans are clearly the most successful business people in South Central, rampant unemployment and high crime are sending many immigrants "back to their home countries."