Why you should care
Asian-Americans earn more than any other racial group … but only if their parents weren’t born in the U.S.
When Julia Lam told her parents she was leaving her job at Facebook to start her own company, they were quick to warn her of the risks. Lam is the founder and CEO of Tara & Co. — a line of functional fashion bags for professional women. While her parents were supportive of her entrepreneurial path, they always felt a steady job was safer. “My parents were concerned about me starting a business because entrepreneurship is kind of like gambling,” Lam says. “There’s a high risk for failure.”
Lam’s parents immigrated to the United States from Hong Kong for college in the 1970s. Her dad is an engineer, her mom a CPA. As immigrants, they wanted their daughter to have every opportunity for success. A steady job that pays well is part of that equation, and they’re not the only Asian-American parents who share this view.
Asian-Americans place more value on hard work and career success than other Americans, according to the Pew Research Center, a value evident in their success as an ethnic group overall. That success has also contributed to the “model minority” stereotype, in which Asian-Americans are seen as more successful than any other minority group.
And in some ways, they are. Asians in the U.S. have much higher rates of upward mobility than all other racial groups in the country, according to a 2018 study from the National Bureau of Economic Research and the U.S. Census Bureau. When analyzing census data and tax records for 20 million adult children and their parents, researchers found that, on average, even Asian-American children born to the lowest-income parents will reach the 51st percentile of the national income distribution.
But this only holds true for children of first-generation immigrants.
The exceptional upward mobility of Asian-Americans is unique to the children of immigrants. Those with American-born mothers have a similar income trajectory to Whites.
“Essentially, if you’re Asian-American and your parents were born abroad, you’re going to make more money than any other racial group,” says Sarah Merchant, an Opportunity Insights researcher who worked on the study. “If your parents were born in the U.S., that won’t necessarily be true.”
The larger study examined the sources of racial disparities in income using data from 1989-2015, covering nearly the entire U.S. population. They found that Hispanic-Americans are moving up in income distribution due to high rates of income mobility across generations, but African-Americans have lower rates of upward mobility as a whole, leading to income disparities across generations. Asian-Americans were the only racial group whose upward mobility was lower among second-generation immigrants.
One reason for this disparity could be that second-generation Asian-Americans are choosing different career paths from their parents. In a 2014 study on immigration and intergenerational mobility in Los Angeles, researchers Jennifer Lee and Min Zhou found that fewer than 20 percent of the American-born Chinese adults they surveyed worked as lawyers, doctors or engineers or had a professional job of any kind. They also found that most immigrant parents of the survey participants believe careers in the arts or fashion are risky because they rely on subjective evaluation — but that because careers in medicine, law and engineering require an advanced degree, such vocations could protect their children from discrimination.
Another factor could be lack of opportunity. Last year, researchers Denise Peck and Buck Gee authored a report for the Ascend Foundation that found Asian-Americans are the least likely among all races to become managers and executives within the Bay Area technology sector. They found similar stats across industries. A 2017 study found that Asian-Americans make up more than 10 percent of top 30 law school graduates but have the lowest ratio of partners to associates for all races. A Goldman Sachs report found that 27 percent of its U.S. employees are Asian-American, but only 11 percent of its U.S. executives and managers are.
The paradox has come to be known as the “bamboo ceiling” — Asian-Americans are more highly educated than any other racial group in the U.S. and the most likely to be hired into tech jobs, but the least likely to climb the ranks. And therein lies the problem, Peck says. “Asian-Americans are ‘hidden in plain sight.’ You see a lot of Asians on tech campuses, so you don’t think it’s a problem,” she says. “But the issue is upward mobility.”
While the reasons for lower income among second-generation Asian-Americans are varied, one thing from the Census Bureau study is clear: “Even if you control for class,” Merchant says, in the U.S., “race still affects how much money you make.”