Understanding economic disparities within the AAPI community
- More than 26 different nations are represented in the AAPI community in the U.S. The broad generalization inherent in the AAPI categorization can obscure the economic reality for many groups within the AAPI community.
- Disaggregated hourly wage data show that groups within the AAPI community face economic disparities. While AAPI average wages are close to the national average, many groups within the AAPI community lag behind.
- Differing immigration paths and histories within the AAPI community influence which groups might be doing better economically in the United States today.
The U.S. Asian American and Pacific Islander (AAPI) community encompasses over 24 million people, with origins spanning countries in Central, East, and Southeast Asia, the Indian subcontinent, and the island nations in the Pacific.1 This diverse population has been growing rapidly in the United States: Between 2010 and 2020, there was a nearly 40% increase in the number of people who identified as Asian alone or in combination, and a 30% increase for Native Hawaiians and other Pacific Islanders.
Whether they have immigrated recently or lived in the United States for centuries, the AAPI community is a vital piece of American society and the workforce. It is important to note, however, that this group is not a monolith, and examining AAPIs as an aggregate can obscure the economic reality for many groups within the AAPI community. In this post, we examine this varied group in more detail and calculate their hourly wages at a disaggregated level to shed greater light on the actual economic circumstances of Asian Americans and Pacific Islanders, and the economic disparities they may face.
Why disaggregation matters
Figure A breaks down the AAPI population by country of origin. Examining disaggregated population sizes can tell us a few things. First, people with ancestry from a lot of different countries are subsumed within this broad categorization. Not even counting the “other” Asian American and Pacific Islanders, more than 26 different nations—each with their own distinct culture, history, and demographic pattern—make up the AAPI group. The broad generalization inherent in the AAPI categorization can have serious implications for economic policymaking as well as budget and resource allocation.
Second, averages and estimates for the AAPI population as a whole will be weighted upward by the largest racial groups. For example, Chinese Americans, Indian Americans, and Filipino Americans make up over half of the entire AAPI category in terms of population. This upward biasing can yield overall figures that are not representative of the entire AAPI population, nor of the countries of origin represented in that catch-all.
What this means in practice is that aggregate economic statistics show AAPIs to be doing relatively well economically. For example, in May 2022, the seasonally adjusted unemployment rate for Asians (not including Pacific Islanders) was 2.4%, significantly lower than the national rate of 3.6%. Similarly, the median household income for Asian Americans as a whole was $16,000 higher than the national figure. While this accurately shows that many Asian Americans are economically secure, this is not the whole story.
The Asian American/Pacific Islander population in the United States: Number of people identifying as Asian or Pacific Islander, alone and in combination in 2020
Source: U.S. Census Bureau, American Community Survey 5-year estimates (2016–2020). Table BO2018: Asian Alone or in Any Combination by Selected Groups and Table BO2019: Native Hawaiian and Other Pacific Islander Alone or in Any Combination by Selected Groups.
To understand why the economic landscape for AAPIs looks the way it does today, it helps to look to the past. Asian American and Pacific Islander Heritage Month was chosen in May to commemorate two major historical events: the arrival of the first Japanese immigrants to the United States on May 7, 1843, and the completion of the transcontinental railroad—largely built with Chinese immigrant labor—on May 10, 1869. However, even though Chinese labor, in backbreaking conditions for pittance wages, was critical in building American economic strength, nativist backlash soon ensued. Mob violence and terror against Chinese communities was followed by state-sanctioned action, and the Chinese Exclusion Act of 1882 quickly put a halt to all immigration from China. This can be seen in the numbers: The 1880 Census shows about 113,000 people of Chinese descent lived in the United States, but this figure had decreased to just 88,000 by 1920.
Immigration policy blocking access for Asians (especially those not in U.S. colonies) continued in the 20th century. The Johnson-Reed Act of 1924 created a national origins quota to allow a very limited number of immigrants, with exclusions for anyone from the “Asiatic Barred Zone.” In the 1922 Supreme Court case Ozawa v. United States, Asians were deemed ineligible for naturalization because they were not racially white. These laws essentially stopped all immigration from Asia for decades.
After 40 years, the Hart-Celler Immigration Act of 1965 dramatically altered the demographic landscape of the United States. The law overhauled the 1920s immigration quota system and liberalized immigration access for “high-skilled” immigrants as well as for people already living in the United States. Millions of people from Asian countries (as well as from Central American, South American, and African countries) would immigrate in the following decades, either through existing family already in the United States or through the high skill and professional visa slots. The sharp change in demographics can be seen clearly in a comparison of the 1960 and 1990 Censuses, as shown in Figure B.
Thirty years of immigration and demographic change: Number of people with reported birthplace in the United States in 1960 and 1990 (weighted count)
Source: U.S. Census Bureau, American Community Survey 1960 5% sample and 1990 5% sample; Steven Ruggles, Sarah Flood, Ronald Goeken, Megan Schouweiler, and Matthew Sobek. IPUMS USA: Version 12.0 (dataset). Minneapolis, MN: IPUMS, 2022. https://doi.org/10.18128/D010.V12.0.
These group-specific histories of immigration matter tremendously when looking at between-group and within-group figures on the economic health of specific demographic groups. These histories explain why Chinese and Indian immigrants who came to the United States under the prioritization of “high-skill” visas are both higher in number, and may be more economically secure, than those from other groups who likely immigrated under much different circumstances. For example, people from Vietnam or Cambodia, who may have immigrated under refugee status or after major warfare in their home country, would likely have different economic circumstances and face different challenges.
As researchers studying disaggregated AAPI data have noted, these different histories mean that groups have different social and economic needs. For example, refugee populations fleeing wartime experiences have specific mental health needs. Language barriers and thus the need for translation resources also differ starkly within groups, as Indian Americans and Filipino Americans (whose educational systems were greatly influenced by their experience as colonies of the British and Americans, respectively) immigrate with high levels of English proficiency compared with other Asian groups.
In short, differing immigration paths and histories within the AAPI community influence which groups might be doing better economically in the United States today. This trend fits in well with the concept of “lateral mobility” within stratification economics which notes that higher socioeconomic status of immigrants in their country of origin is likely to be retained by their children, due to factors like pre-migration capital (including education and training).
Economic inequality within the AAPI community today
Indeed, our calculation of hourly wages for the disaggregated community shows us that groups within the AAPI community face economic disparities, both relative to the U.S. population as a whole and the AAPI population as a whole. Figure C shows average hourly wages for full-time, year-round workers. While the AAPI average is close to the national average, we can see just how many groups within the AAPI community lag behind. For example, people of Bhutanese descent were paid hourly wages ($15.36) that are just half the national average.
Many Asian Americans and Pacific Islanders are paid lower wages than the national or group average: Average hourly wages for full-time, year-round workers in 2019
Source: U.S. Census Bureau, American Community Survey 2015–2019 5-year estimates; Steven Ruggles, Sarah Flood, Ronald Goeken, Megan Schouweiler, and Matthew Sobek. IPUMS USA: Version 12.0 (dataset). Minneapolis, MN: IPUMS, 2022. https://doi.org/10.18128/D010.V12.0.
Understanding the differences within the AAPI population can help advocates and policymakers better address the economic challenges different groups face. The economic circumstances and policy solutions required vary regionally and by state as well, given differing immigration patterns. Recognizing that the AAPI community is very diverse and does not all experience the labor market and economy in the same way is paramount to making sure specific populations aren’t left behind. Policymakers must look beyond and behind the aggregate “Asian” statistics to truly understand the scope of the economic disparities.
Asian Americans have been facing staggering levels of xenophobic violence in the wake of the pandemic and economic recession. Sadly, this scapegoating and terror is not new, as anti-Asian violence has peppered American history, especially in periods of great economic upheaval and backlash. In the past, institutions have responded and reacted with policies entrenching systemic racism, from the Chinese Exclusion Act, the Alien Land Laws, the Supreme Court decision Korematsu vs. United States, and more. We have an opportunity now to do things differently, and to celebrate and honor the contributions of Asian Americans and Pacific Islanders in the United States. Our legislation and policies can push for economic mobility and boost wages and ensure that all Asian Americans and Pacific Islanders can achieve economic prosperity. AAPIs, who claim ancestry from over 20 nations across the globe, helped create the America and the American Dream we know today; our economic policies must ensure that they are all able to achieve it.
1. The Census Bureau describes Asian as “A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam” and Native Hawaiian or Other Pacific Islander as “A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands.” People of Middle Eastern or North African (MENA) descent are categorized as white, and advocates have long pushed for a separate MENA category.
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