Better Data Needed To Dismantle The ‘Model Minority’ Myth About Asian Americans: Race, Jobs and the Economy April 2024 Update

In this edition of our Race, Jobs, and the Economy series decoding each month’s Bureau of Labor Statistics (BLS) monthly jobs report, we mark Asian American and Pacific Islander (AAPI) Heritage Month by spotlighting the state of Asian American workers in the job market.

Analysis of Topline Figures in the March BLS Report

The BLS reports that the economy added 175,000 jobs in April, well below the average of 242,000 over the last 12 months. This is accompanied by a slight increase in the unemployment rate to 3.9 percent, which the BLS notes has stayed between 3.7 percent and 3.9 percent since August 2023. These dips will be welcomed by the Federal Reserve, which sees a cooling economy as an asset in its fight against inflation. But they are disappointing for many job seekers and households.

Jobs & Sectoral Trends

The industries with the largest employment gains were healthcare (+56,000), social assistance (+31,000), retail trade (+20,000), and transportation and warehousing (+8,000). The lower-than-usual overall jobs gains are partly due to the poor showing of the government sector which added only 8,000 jobs, far below its average of 55,000 jobs.

While the topline unemployment rate has remained relatively constant over the last year, the “true” unemployment rate, currently 7.4 percent, has steadily risen to its highest level since December 2021. Called U-6, the “true” unemployment rate includes those who are employed part-time for economic reasons, discouraged workers who want work but believe no jobs are available to them and workers who want work but are not actively looking for a job. By contrast, the topline unemployment rate (called U-3) measures only those who are unemployed and have looked for work in the previous 4 weeks. U-6 takes into account those marginally attached to the labor market and provides a more revealing look at the economy as a whole, but only U-3 is broken out by race or ethnicity.

Asian Americans in the Economy

A glance at the BLS tables would seem to suggest that Asian Americans are faring quite well in the 2024 job market. The agency reports an Asian American unemployment rate of 2.8 percent, significantly below the overall 3.9 percent rate economy-wide.

Unfortunately this is not a full or precise picture for many millions of people. The reality of Asian American economic experience is far more complicated – and largely inscrutable because of failings in how many federal data-gathering efforts treat Asian identity.

In the last 2 decades, Asian Americans have been the fastest growing demographic group. The number of Asian Americans in the country has more than doubled since the turn of the century, rising more than 105 percent to a total of 21 million. In 2021, there were over 642,000 Asian-owned businesses with a total payroll of more than $1 trillion. Both of these business figures are the highest among all minority groups in the United States. 

Despite the aforementioned statistics, one of the challenges with assessing the economic position of Asian Americans is the lack of appropriate data. For example, the monthly BLS report breaks out the unemployment rates, labor force participation rate, and other metrics by gender for all other races, but not for Asians. Partly due to their smaller share of the population (~7 percent) and relatively better economic position (on average), data on Asians is not prioritized like other minority groups. When data is available it is frequently aggregated and does not make distinctions between different Asian subgroups.

Disaggregated data is information that has been separated into smaller units to help elucidate underlying trends that are not readily apparent in the aggregate. Depriving analysts of that clarity when it comes to the Asian American community is odd to say the least. Asian Americans are not a monolith: Of that 21 million overall population, nearly 60 percent of all Asian Americans are of Chinese, Indian or Filipino descent. Vietnamese, Korean and Japanese Americans account for another fifth of the total, leaving 19 percent – nearly four million individuals – scattered across numerous smaller ethnic categories.

Though the ethnic diversity of the Asian American population is often obscured in economic data, it is still possible to identify some stark differences in poverty, wages, wealth and other key economic indicators.

The poverty rate for Asian Americans as a whole was 10 percent in 2022, comparable to White Americans at 9.5 percent. However, there are stark differences in poverty levels between subgroups within the Asian-American population. The poverty rate was highest among Burmese Americans (19 percent) and Hmong Americans (17 percent), and lowest among Indian and Filipino Americans (6 and 7 percent, respectively). In terms of income, Asian Americans had a median household income of $108,700 in 2022, but this racial benchmark masks stark ethnic disparities. In 2021, Burmese Americans made a median income of just $44,000 while Indian Americans made $119,000. Indeed, economic inequality within the Asian American community is the highest among all racial groups. As we have noted in our reports on disaggregated data in mortgage lending, Indian and Chinese borrowers often dominate the Asian category and obscure the struggles to build wealth that other Asian groups often face.

Without disaggregated data, the model minority stereotype will continue to thrive. This stereotype falsely suggests that Asian Americans are the smart, hard-working, ideal “minority” that live in the United States without any hardship. Many commentators wield the model minority myth to vilify non-Asian minority groups. Others hold up misleading aggregate figures about an imaginary monolithic Asian American prosperity as proof that structural racism does not exist. 

The stereotype erases the different struggles of Asian American subgroups affected by poverty and racism. It also minimizes the racial oppression faced by Black and Latino Americans, implying that if they simply worked harder, they would also achieve economic mobility. In addition to providing a convenient and false rationale for White people to reject equity measures intended to combat the structural racism these groups face, this harmful myth has also sowed mistrust and division between communities of color. The model-minority myth has pernicious effects on policymaking, where there has been a lack of economic assistance and social services directed towards both Asian-American subgroups and Black and Latino populations, reinforcing racial wealth and income disparities.

Disaggregating data would allow policy to better serve the differential needs of groups and allow for better research on outcomes and experiences within these subgroups. This is especially important for Asian Americans as their topline unemployment rate of 2.8 percent obfuscates the complex reality presented here and in NCRC’s previous work. 

While it stands to reason that labor market experiences are also much harsher for the same subgroups who exhibit far lower wealth and far higher poverty rates than aggregated Asian American statistics suggest, the reality is that we do not know because we do not measure. And what we do not measure, we cannot effectively address.

Joseph Dean is NCRC’s Racial Economic Junior Research Specialist.

Manan Shah is a Project Specialist at NCRC.

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