The United States' Response

The Vietnamese exodus and their resettlement in the United States could not have come at a worse time in that period of American history. The Vietnam War was an extremely unpopular war at home in which 57,692 American men and women died with 2,500 listed as “missing in action” or as prisoners of war (Capps, 1982). The war deeply divided the nation.

Indeed, the general atmosphere of the American public at the end of the war was hostile toward the Vietnamese refugees. The Gallup Poll taken in May 1975 showed “54% of all Americans opposed to admitting Vietnamese refugees to live in the United States and only 36% were in favor with 12% undecided” (Time, May 19, 1975). A common concern of the American public was one of economic self-interest–a fear of having jobs taken away as well as too much public assistance and welfare given to the refugees. During this time, the United States was in a period of recession with an unemployment rate of 8.3% (Kelly, 1977). Several early studies documented that a substantial number of Americans preferred the exclusion of the refugees from the United States (Schaefer and Schaefer, 1975; Liu, Lamanna, Murata, 1979; Starr and Roberts, 1982b; Simon, 1985).

Apart from specific conditions resulting from the Vietnam War and the recession, this hostile reception given by the American public represented a continuation of the tradition of racism and hostility toward immigrant

minority groups that has been prevalent and well documented throughout United States' history (Dollard, 1957; Gans, 1962; Gossett, 1963; Baudet, 1965; Smora, 1966; Jordan, 1968; Thomas and Znaniecki, 1968; Knowles and Prewitt, 1969; Conroy and Miyakawa, 1972).

The Vietnamese refugees therefore arrived in the United States with a legacy of hostility directed toward Asians. Most of hostility was racially and economically based (Gilbert, 1951; Daniels, 1962; Walovits, 1966; Daniels and Kitano, 1970; Ogawa, 1971; Rabaya, 1971; Saxton, 1971; Wu, 1972; Sandmeyer, 1971; Sue and Kitano, 1973; Ignacio, 1976; Lyman, 1977; Modell, 1977). Despite this legacy, there were a substantial number of Americans who extended humanitarian aid and sponsored families out of refugee camps.

The United States' Government Dispersal Policy

In order to minimize the social impact of the large influx of Vietnamese refugees on an American public that was unfavorable to the Vietnam War, the United States government adapted the Refugee Dispersion Policy. This policy served four purposes: (a) to relocate the Vietnamese refugees as quickly as possible so that they could achieve financial independence; (b) to ease the impact of a large group of refugees on a given community which might otherwise increase the competition for jobs; (c) to make it logistically easier to find sponsors; and (d) to prevent the development of an ethnic ghetto (Liu, Lamanna, Murata, 1979). Given the political and social climate of the United States at the time, the influential factors leading to this Dispersion Policy were primarily political and financial, not social (Kelly,

1977). If this policy was carried out successfully, the Vietnamese refugees would quickly assimilate into the American society.

As a result, nine voluntary agencies (VOLAGS) were contracted by the government's Interagency Task Force to handle the resettlement of the refugees in the United States. The agencies included the United Hebrew Immigration and Assitance Service, the Lutheran Immigration and Refugee Service, the International Rescue Committee, Church World Service, the American Funds for Czechoslavak Refugees, the United States Catholic Conference, the Travelers Aid International Social Service and the Council for Nationalities Service. Each refugee family chose a resettlement agency in refugee camps. If the refugee did not have a preference, one was assigned (Liu, Lamanna, Murata, 1977).

The primary task of these agencies was to find sponsors that would have the ability to fulfill both financial and moral responsibilities, and to match them with the refugees' families. The responsibilities included providing temporary food, clothing and shelter, assistance in finding employment or job training for the head of the household, enrolling the children in school and finally, providing ordinary medical care (Liu, Lamanna, Murata, 1977). In other words, the sponsors would serve as a resource to introduce the Vietnamese refugees into the society while they become self-supporting.

The Resettlement of the Vietnamese Refugees

There were four ways for the refugees to leave the four temporary refugee camps (Camp Pendleton, California; Fort Chaffee, Arkansas; Eglin Air Force Base, Florida; and Fort Indiantown Gap, Pennsylvania) and enter into

American society: (1) resettlement to a third country, (2) obtain repatriation to Vietnam, (3) demonstrate proof of being financially self-supportive, and (4) find a sponsor through the voluntary agencies (Kelly, 1977).

Although third-country resettlement was encouraged by the United States government, this avenue was hardly chosen by the Vietnamese refugees. Very few other countries offered their assistance unless the refugees fulfilled at least one of the following requirements: (a) professionals in needed areas, (b) had relatives living in that country, or (c) could speak the language (Kelly, 1977).

Only a small number of refugees chose to return to Vietnam. Montero reported (1979, p. 27) “by October 1975, repatriation had been granted to 1,546 refugees by the new government of Vietnam.” The majority were military men who were forced to leave their families behind at the time of their evacuation.

The third method by which the refugees were allowed to leave the refugee camps was to demonstrate financial independence. Kelly (1977, p. 129) and Montero (1979, p. 27) again documented, “the Task Force required a refugee family to show proof of cash reserves totalling at least $4,000 per household member.” However, due to their abrupt plight, only a few were qualified to use this avenue. In addition, not many refugees would report to the authorities their financial savings for the fear of the unknown that awaited them. Thus, the Vietnamese refugees entered the United States' society primarily through the family sponsorship method.

The sponsors found by voluntary agencies consisted of congregations, parishes or affiliates, individual families, corporations, and companies with

former Vietnamese employees. In addition, if the refugees had relatives that fulfilled the same requirements, they could qualify as sponsors as well. However, Skinner (1980, p. 104), reported only 15,000 Vietnamese living in the United States prior to 1975. Most of these individuals were students staying temporarily on visas or wives of U.S. soldiers. In essence, the Vietnamese did not have an established community in the United States and therefore, this method hardly applied to the first waves of refugees.

Nevertheless, the family sponsorship method was used more frequently at a later time by the Vietnamese from the first waves in order to sponsor relatives and friends who entered after 1975. In either case, the Vietnamese refugees would be dispersed throughout the United States as a result of this policy.

The Vietnamese Adaptation Process

These, then were the structural conditions that the first Vietnamese refugees had to face at the time of their arrival. How did this affect their experience?

First of all, as a result of the Refugee Dispersion Policy, the Vietnamese refugees were resettled throughout the United States. Table 2 illustrates the results of this Government Dispersion policy for the first waves of Vietnamese in the U.S.:



The Dispersion Policy continued throughout succeeding waves of Vietnamese refugees. Table 3 represents the number of refugees admitted to the United States between 1975-1978 while Table 4 represents the years 1979-1982 along with their primary immigration state. Finally, Table 5 represents the total number of Vietnamese for each of the migration period along with their primary immigration state and their total percentage in each state:






Secondly, the extended family network that existed in their homeland was temporarily broken by migration. In order to find churches, social organizations, families and individuals that were willing to sponsor the Vietnamese refugees, many Vietnamese extended families were broken-up. Only immediate family members were allowed to stay together. In addition, many of the social networks that formed while they were abandoning their homeland as well as in refugee camps were also temporarily disrupted (Mineta, Francis, Ginger and Low, 1975 as cited in Liu, Lamanna, and Murata, 1979). This forced the Vietnamese refugees to interact with and depend on the sponsors and the immediate environment for social and

emotional support. In essence, the Vietnamese were deprived of the emotional, social and psychological support generated from the extended family and also the support that was generated from a shared culture, language, customs and experience.

Thirdly, in order to minimize the strain put on local economies by the refugees, the government encouraged the American sponsors to help the refugees to become financially independent as soon as possible. Therefore, in order to survive, many Vietnamese accepted jobs of lower status than the ones they had in Vietnam. The majority of these jobs were concentrated in the periphery economy which required no skills and little or no English proficiency. Table 6 illustrates the different first jobs obtained by refugees as reported by Kelly (1977, p. 179) while table 7 illustrates the first jobs held by those I interviewed.



Since language proficiency was thought to be the major factor which prevented the refugees from obtaining jobs in the primary economy, their first few jobs became a method of surviving while they learned the new language in the hope of obtaining other jobs later. Among those interviewed, three categories of people surfaced as they explained their situations while learning English. The first category includes those who used English to study either a new occupation that did not exist in Vietnam or a continuation and modification of an occupation from Vietnam.

Two of the respondents fall into this first category. Mr. Dang, a former low-ranking officer in the Navy Republic of Vietnam in his early 40s, works

as a Certified Public Accountant outside of the community in a Savings Associations in Long Beach. Although he doesn't work directly in the community except during the tax season when friends and other Vietnamese utilize his expertise, he and his wife, shop, eat, and spend time there with their children. He recalls:

“When I left my sponsor and lived on my own, I got a job as a gas station attendant and went to Los Angeles City College and studied accounting. I don't remember why I chose it but it wasn't extremely difficult. I think my sponsor encouraged me to follow his advice and footsteps. He was also studying to take the CPA exams. You just have to be diligent and study hard. Once in a while though you just get a big headache from reading too much.”

The second respondent, Mr. Dao, a former diplomat in his mid-40's, owns two Legal Service Office in Orange County and works primarily with Vietnamese clients. He's familiar with the English language and although he studied law in Vietnam, the two legal system are very different. He has been studying to take the California Bar exam for the 5th time. I interviewed him prior to the last time he took the exam:

“It's harder and harder to study for me. I am not young like you. I have a lot of things on my mind. I work full time, I have a family and then I have to study. I can't study the way I used to, you know? Sure law is difficult but it's the time pressure that gets me. If I was given enough time, I can pass it [the Bar exam] but here, you have to have the answers immediately, bang, bang, bang.”

Mr. Dao typifies a group of Vietnamese refugees with certain skills and occupations compatible with the United States' economic structure. However, the transferability of their former occupation to those in the

United States is not always successful due to the language barrier. Although there are certain professions such as medicine, pharmacy, engineering, dentistry and other professional occupations that are transferable, one must first achieve English proficiency. Then, a series of state and federal examinations have to be successfully negotiated in order to be recertified. It often takes years to acquire enough English proficiency before these exams can be passed. As a result, this process sometimes poses problems for some of the refugees. Some of them are middle-aged and unable to master the English language. In the end, some of these individuals give up trying and are forced to either work for lesser wages and prestige or change professions altogether.

Mr. Tran, a former lawyer in Vietnam in his 40s, was not as fortunate as Mr. Dao. In the interview, he remembers:

“I like practicing law in Vietnam, it was a lot different than here. It wasn't as structured. At first, I wanted to continue with law but my English wasn't good enough. It's very different. I couldn't afford attending a law school. Besides, I didn't have the patience to study. I also didn't have time to sit there and read all these books. I had other things to worry about. My wife was still in Vietnam and my energy was spent trying to bring her over here.”

He abandoned his pursuit of a law career and enrolled in CETA, a government job training program. He concluded his training in 1980. He then moved to Orange County from Los Angeles, found a job in a small industrial firm in as a technician. Unfortunately, he hurt his back in 1984 and

is now collecting Workman's compensation. Despite all this however, Mr. Tran was lucky, his wife rejoined him in 1980. He is living with his wife and three children in Orange County and is doing odds and ends jobs.

The second category, on the other hand, includes people with occupations and skills that more easily allow for re-entry into former occupations. These skills and occupations are primarily concentrated in industrial and skilled work such as automechanics, welding, carpentry, electrical, and plumbing. One of the respondents I interviewed is Mr. Truong, a former lieutenant in the Vietnamese Navy. In his late 50s, he is a bus mechanic in Orange County and declares:

“I wanted to be a medical doctor in Vietnam but was drafted into the Navy. I like working with my hands a great deal and use to work on boats and little things in Vietnam. I was already too old when we got here so instead of learning something new and that I didn't know about, I just started to work as a mechanic-assistant. It was hard because they [the other mechanics] spoke really fast and had their special tools. I had to read a lot of manuals to pass an annual recertification test. It was a struggle but I had my two sons to feed and a family that I wanted to bring over.”

The final category includes former white collar workers such as politicians, soldiers, teachers, and professors, who have found it almost impossible to continue their former career. These individuals abandoned their former occupations in pursuit of something more marketable. Mrs Nguyen, a former Junior High School teacher in Vietnam in her mid 50s did not have the opportunity to continue her career. As she reflects:

“I couldn't continue as a teacher. Who wants a Vietnamese school teacher? I had to find something else to do. Although I was receiving AFDC (aids to families with dependent children), I wanted to find a

job. I first worked illegally as a cook in a Vietnamese restaurant to save money and receive AFDC at the same time. But then I got a job as a key punch operator in Bank of America in Los Angeles which had to be reported.”

In sum, the United States' Refugee Dispersal Policy, along with the absence of an established Vietnamese community, had a two-fold effect on the Vietnamese refugees. First, these individuals were geographically and socially isolated. In essence, the Vietnamese refugees were deprived of the mutual support network from family and friends that was so prominent in their homeland. This seems to affect divorced/widowed female heads of households the most, followed by older men who were established in Vietnam. These individuals seem to be more vulnerable to such mental health problems as depression, homesickedness, grief over the losses, survivor-guilt syndrome, suicide impulses, uncertainty about the future, and general frustration (Rahe, Looney, Ward, et al. 1978; Lin, Tazuma and Masuda, 1979; Miller, Chambers, and Coleman, 1979; Kinzie, Tran, Breckenridge, and Bloom, 1980; Masuda, Lin, and Tazuma, 1980). The lack of interaction and moral support offered by family members, friends, or a community is compounded with the unfamiliarity of a new country.

Secondly, the Vietnamese refugees were indirectly pressured to find jobs almost right away. Since the United States was in a recession and job opportunities were difficult, many obtained lower status jobs to survive. In addition, many of the wives had to work for the first time in their lives to supplement the husband's low income and help support the family (Montero, 1979; Bach, 1980; Marsh, 1980; Bach and Bach, 1980; Strand, 1984).


The Formation of the Vietnamese Community

These were the structural and social conditions that the Vietnamese refugees have encountered and dealt with since their arrival in 1975. These structural and psychological factors alone, however, cannot explain the reasons and forces that were instrumental in the formation of a community and an ethnic enclave. Another set of factors involves the cultural characteristics and the background of the people of this group.

First of all, there is a great variation in backgrounds of the refugees who came in the different waves. For those who came in the first and second wave, the majority were Vietnamese from middle to upper-middle and upper class in social and economic status when they left Vietnam. They were generally well-educated and have had some experience with Western culture. They were also politically informed regarding the deteriorating conditions in Vietnam, and therefore were probably more prepared for the evacuation.

Coming from a higher social, political and economic background would also indicate they they had time to transfer some of their wealth into French, Swiss, American and other foreign banks before the fall of South Vietnam in April 1975 (Kelly, 1977; Liu, Lamanna, and Murata, 1979). Other arrangements for this transfer took the form of sending gold, silver, jewelry and national treasures abroad to relatives and friends. It was a common practice at that time for wealthy families to send their sons abroad to avoid being drafted, with the excuse of obtaining a college education. Finally, there were ethnic Chinese in addition to Vietnamese who married French,

Americans, and Hong Kong Chinese who provided numerous connections for expatriating family wealth.

In some cases, the transfer of wealth would later serve as a source of capital to open small businesses. This group of refugees also had the advantage of having skills that would later be beneficial in running a small business because of their educational background. These skills include the ability to fill out forms, do inventory, comply with laws and regulations, establish connections, and so forth. These skills are generally regarded as entrepeneurial skills. This would later serve them well as many became owners and operators of small and larger businesses.

The third, fourth, and fifth waves of Vietnamese refugees were less fortunate than those in the first two waves. They did not have the chance to prepare themselves for the evacuation and therefore the majority left empty-handed. They were for the most part from lower social political and economic backgrounds and often were living in the cities outside of Saigon, suggesting that they have had little experience with the Western culture.

An interesting characteristic on the composition of this latter wave of refugees is in the large number of ethnic Chinese included. Ethnic Chinese are Chinese who live in Vietnam and fiercely preserve their cultural distinctness and do not consider themselves Vietnamese. They were generally concentrated in business, industry and commerce in Southeast Asia in general and particularly in Vietnam. (Skinner, 1951 as quoted by Desbarats, 1986). As a result of their experience in Vietnam, ethnic Chinese are more familiar in operating small, family-owned businesses.


Unlike the previous two waves, with the possible exception of the ethnic Chinese, these people lacked the entrepeneurial skills and the capital to act as owners of small businesses. They would thereby later serve as either laborers and/or consumers in the enclave economy, selling their human labor to the owners who had the capital and the entrepeneurial skills. The role of those Vietnamese refugees who entered the United States thereafter is very similar to this group.

Despite the chaotic and abrupt nature of the Vietnamese refugees' departure, a substantial number of people came in family groups, accounting for approximately 62% of all the immigrants from the first two waves (Kelly 1977). However, as a result of the Refugee Dispersion Policy of the United States' Government, only immediate family and their members were allowed to stay together.

The consequence of this policy resulted in a relocation of Vietnamese across the United States which temporarily disrupted their mutual support system. Weather conditions that exist in many parts of the country were substantially different from that in their homeland. In only a few cases was the weather similar to that of Vietnam. Among these places are California, Texas, and Florida. This fact played a significant role in the formation of this enclave economy.


The 1980 Census Data on the Vietnamese in the United States indicated that most populated states are California with 34.78%, Texas with 11.34%, Louisiana with 4.43%, Washington state with 3.65%, Virginia with 3.86%, Pennsylvania with 3.31% and finally, Florida with 2.89%. Table 8 presents the population of Vietnamese in the United States from the 1980 Census data, along with the percentage in each state.



Table 8 illustrates that a disproportionate number of Vietnamese refugees residing in only three states—California (34.78%), Texas (11.34%) and Louisiana (4.43%)—constituting 50% of the entire Vietnamese population. In addition, almost two thirds (64.26%) live in only 7 states, including the aforementioned three states, plus Virginia (3.86%), Washington state (3.65%), Pennsylvania (3.31%) and Florida (2.89%).

As the harsh winter conditions hit the cities throughout the United States where Vietnamese refugees were initially resettled, the desire to find a location with a warmer climate and a Vienamese community increased for those who were had settled in colder parts of the United States. California's reputation of having a warm climate with an abundance of unskilled jobs, espcially in San Jose's “Silicon Valley”, Santa Ana, and San Diego along with the existence of small Vietnamese communities in Los Angeles and San Jose became a magnet or an “attraction” that would draw people. Baldwin (1982, p.23) found that 43% of Vietnamese migrating to Orange County gave “climate” as their primary reason for migrating while 22% gave “job/finances/education” as their second reason, followed by “family nearby” with 13%.

In addition, since there were a number of ethnic Chinese (Chinese who lived in Vietnam but spoke Chinese and do not consider themselves Vietnamese) who were relocated in California, Los Angeles' Chinatown served as a catalyst for learning the new culture. Mrs. Nguyen recalls her experience working for ethnic Chinese employers:


The owners were two married couples that are Chinese from Vietnam. You know, they are used to working in the retail and wholesale business back home. They have the brain, the experience, the knowledge and the advantage of the connections here. They can use the Chinese here and those they know from Hong Kong and Taiwan to help them with their business. They asked Chinese they know here to become their partners and open businesses with them.

A number of the businesses raised the capital needed through this social network. There were also other Vietnamese from the first two waves with enough capital who managed to start their own small businesses. However, due to the overcrowded conditions and the low possibility for expansion, Los Angeles proved to be far from ideal for people who wanted to open their own businesses. It did provide a springboard, however, from which the skills and needed experience could be drawn later.

The formation of the Vietnamese ethnic enclave economy in Orange County can be understood therefore as a synthesis of both structural barriers and the Vietnamese refugees cultural characteristics. However, in order for an ethnic enclave economy to be functional, a community needs to be present.

The Vietnamese Community

The Vietnamese community in the United States in general, and in Orange County in particular, is primarily new, a product of the large number of Vietnamese refugees who were sponsored out of Camp Pendleton. Added

to the secondary migration of Vietnamese and other factors discussed earlier, California has the largest number of Vietnamese.

The 1987 Vietnam Business Directory lists over 1,700 “firms” for the Los Angeles and Orange County areas. However, one of the characteristic not shown in the directory is whether or not the business is owned by Vietnamese or by ethnic Chinese. Although some are not strictly businesses (associations, churches, temples) and are marginal cases, the directory nevertheless suggests a well organized and active community from the wide range and diversity of firms, services, and organizations listed.

The Vietnamese community in Orange County boast all the firms regularly found in other enclave economies: restaurants, supermarkets, medical clinics, cafes, legal firms, cultural (herbal) medicine, tailoring and fashion shops, cosmetic and beauty salons, bookstores, video stores, and pharmacies and so forth. In addition, however, the Vietnamese community has an unusally large number of community organizations as well as a wide variety of periodicals available. Table 9 is the Table of Contents from the 1987 Vietnam Business Directory listing of major categories of businesses.



Table 9 illustrates that Vietnamese in Southern California are participating in a wide range of businesses. These range from specialized cultural and ethnic businesses to businesses commonly found throughout cities in the United States.

There are 6 major book stores located in Westminster, and about a half a dozen of shops that print Vietnamese books, newspapers, advertising brochures, and community activities pamphlets. In addition, a strong indicator of this community is reflected in having 34 newspapers and magazines circulating locally and nationally, ranging from daily to biweekly to monthly. The newspapers and magazines focus on most aspects of daily life from cultural events, economic news, social issues, art, entertainment, education and finally sporting news. All are written in Vietnamese with some in both Vietnamese and English. The community press serves as an important community indicator as reflected by earlier research by Park (1922) and Janowitz (1952). All the printing materials can be seen circulating on a regular basis during the weekends when I observed a large number of young workers distributing advertising leaflets to people shopping there and leaving them on people's cars.


There are 58 different associations listed in the 1987 Vietnam Business Directory. These associations are generally divided into three categories: (1) religious–including Catholics and Christians churches, and Buddhist temples, (2) professional–including the associations of lawyers, doctors, dentists, and so forth, and (3) mutual assistance–including former military unit members, students, martial arts, refugee assistance, resettlement and sponsorship. Other factors indicating the existence of a community include the formation of religious institutions such as churches, temples, community service organizations and community-planned activities. These activities include New Year's Celebration (Tet), free music concerts, a variety of sporting events, traditional festivities and community meetings.

In closely observing the Vietnamese community, one does find evidence of an ethnic enclave. There seems to be a geographical factor that is critical in explaining the existence of this enclave economy. The heart of the enclave economy is located within a mile radius of Bolsa Boulevard in Westminster. There are twelve major shopping centers in this area. Some are fully developed and operated while others were under construction (Brody, 1987). This area is generally referred to simply as “Bolsa” by the Vietnamese I interviewed and those in California.

As previously mentioned, Orange County is both climatically and locationally favorable to the development of an ethnic enclave economy. The area is located on a vast and semi-developed piece of land that offers cheap rental rates, thereby allowing the possibility for growth and expansion. Seven of the twelve shopping centers are co-owned or managed by Frank

Jao, an ethnic Chinese land developer and other Vietnamese, ethnic Chinese, and overseas Chinese investors (Brody, 1987).

Although there is a definite Chinese flavor blended into the signs and ownerships of some of the centers, and while some people have questioned whether it would be more appropriate to call it “Little Cholon”, (the Chinese business district outside of Saigon) it is generally agreed that Bolsa is considered to be the Vietnamese capital of the United States (Brody, 1987). Throughout my time spent as a participant observer, I observed a large proportion of Vietnamese shopowners as well as Vietnamese customers frequenting the stores and other establishments.

The Ethnic Enclave

Labor market analysis generally centers around three essential elements; capital, labor, and market, and the social relations between these (Mar, 1985b; Portes and Bach, 1985). The first essential element, capital, refers to money either brought over from abroad or accumulated while in the United States. Labor, the second essential element, includes labor from the owners, family members, fellow ethnic workers and outside workers (Portes and Bach, 1985). The final element, market, refers to consumers who are buying the products sold by the businesses. For an ethnic enclave to exist therefore, these three elements must be present.



Capital is provided through three main sources. The first source of capital consists of the assets brought over to the United States by the people from the first and second wave. The second source consists of the resources and connections from the Chinese-Vietnamese in Chinatown and overseas Chinese (Brody, 1987). The third source–the “hui” (rotating credit system)–imported from Asia, is a method widely use by Chinese, Japanese, and Koreans for accumulating a lump sum of money at a lower interest rates and without the strict requirements imposed by lending institutions (Light, 1972; Lyman, 1974; Miyamoto, 1972; Bonacich and Modell, 1980; Kim, 1981). Although there are variations between North, South Vietnamese, and other Asian countries, the basic principle of the “hui” system is the same. Mrs. Nguyen, the former junior high school teacher, gave the following description:

“Under this system, a person in need of money would organize a group of people, usually friends, relatives, people from the same village, or trusted colleagues who agree to contribute a fixed sum of money to a common pool for a fixed time period; usually months or the same amount of months as the amount of participants. At the first meeting, everyone contributes to the common pool but the organizer collects the first sum of money. A month later, again, each participant would contribute the same amount of money and depending on the agreement, either by lottery or by bidding a certain interest rate, a different participant would collect the sum of money from the pool. This process would repeat and continue to rotate recepient until each and everyone of the participants had received the money from the common pool. By the end of the agreed period, everyone would have received a lump sum of money and paid no interest to banking or lending institutions.”


Since a small business requires relatively little capital, this system would sometimes generate sufficient capital for investment. In his study of Vietnamese Entrepeneurs in the U.S.A, Leba (1985) reported examples of an Egg Roll Manufacturing business needing only $3,000 to open and operate, and the capital needed to open a Rice Noodle Soup shop varies between “a few hundred dollars to thousands of dollars” (p. 149).

In this study, I asked Mr. Dao, the Legal Service Office owner, about the necessary capital to open his office. He replies:

“It didn't take very much to open this office. The start up funds was about $2,000-$3000. Most of it is because the owners want you to pay a couple of months' rent in advance. Then there is the furniture, I just bought those. It didn't cost very much since my office doesn't require a whole lot of things. I didn't need to buy anything special or expensive, just functionable. I basically just needed a desk, a filing cabinet, lamps and a phone. From then on, I just have to pay the rent, the electricity, the phone and the water.”

When asked whether he used the “hui” rotating credit system, he continues:

“No, not to open my office. I was able to save enough money because my wife and I both worked. We were somewhat fortunate. It can be somewhat difficult to organize although I have friends who played it [hui] and opened their business that way but they also had a little money saved.”

Although there are some benefits from the rotating credit system, people have also been cheated and lost their money. Mrs Nguyen, the former worker in a Vietnamese restaurant, now a supervisor in a computer manufacturing company, still participates in a “hui”. When asked if she ever

lost money, she explains:

“I never really lost any money. I don't participate in large “hui”, only small ones. You know, $30, $50 a month or so. Those that I play with are usually long time friends and wouldn't cheat. I know people who lost money though. Also, I heard from friends that in San Jose, someone just collected thousands of dollars and left. Mrs Pham [her sister-in-law in Texas] also heard of people losing a lot of money. The organizer is usually responsible and accountable for everybody but sometimes, you just don't know.”

In sum, “hui”, the rotating credit system, is sometimes used by Vietnamese refugees to help open small businesses that require little capital. Although this would explain the exponential growth of Vietnamese small businesses, it does not account for larger businesses or firms requiring considerably more capital. Further research is needed in this area.


There are two main sources of labor in the Vietnamese enclave economy. The first involves those workers who are family members, relatives or friends of the owners. Similar to the other Asian immigrant groups, family members are widely used as workers in small, family-owned businesses (Bonacich, Light, and Wong, 1976; Bonacich and Modell, 1980; Min, 1986). This is another part of the Vietnamese culture that has been discussed earlier. The second source involves those with little or no education, without any marketable skills, and usually unable to speak English. Since they are not able to find better jobs outside of this economy, it is more “convenient” for them to work in this enclave economy. These two groups often overlap and are not easily distinguishable. Some of the workers from both groups are too

old to learn new skills or try new occupations and are therefore only left with the option of working within this enclave economy. Others are uneducated and not aware of other opportunities outside of the enclave economy. (it is doubtful in any event that they could obtain better jobs elsewhere.) This is not only with respect to higher wages and better working conditions, it is also with respect to other benefits that are not measured in monetary values. A significant part of this labor force consists of workers who have just recently entered the United States from refugee camps in Thailand, Malaysia and other nations, and chose to relocate in this enclave economy because of the support that it offers. These workers are usally paid low wages, work long hours without many benefits: they are exploited by the owners for their cheap labor. Despite this treatment, most choose to stay and work for them.


The third and final element needed for an enclave economy is a market. With the largest population of Vietnamese in California, this enclave economy has a substantial market from which to draw customers. Many Vietnamese who live relatively far away are willing to travel the distance to have “a taste of home”. It is also an area where people can shop for their traditional goods, taste authentic Vietnamese food, socialize with other Vietnamese, use the services and enjoy the mutual support system that is there.

These three elements create the possibility of forming an ethnic enclave economy. But for such an economy to exist and thrive, something must hold

it together as a cohesive unit. The cohesion is provided by the symbiotic relationship between the workers and the owners, in which both parties benefit. Although the workers are being exploited with respect to their wages and working conditions, there are nonetheless tangible benefits that cannot be measured in terms of monetary values. These benefits include the job itself, along with certain “securities” that come with it, such as the opportunity to live in a Vietnamese community that they are familiar with; an opportunity to socialize, develop social ties, and perhaps find a chance to meet one's mate; friendship with other Vietnamese; the usage of the mutual support system, the convenience of communicating in the same language and be able to express themselves; and finally, the confortableness of being at “home”. The fear and uncertainty of a new and strange land is thereby greatly reduced. These benefits and securities that workers working in this enclave economy have that cannot be measured in monetary values nor observe through usual data collection methods, except for personal, in-depth interviews.

What benefits do owners obtain in this relationship? First of all, they receive a cheap source of labor, thereby enhancing their profits. Secondly, they also enjoy the personal freedom of being their own boss and not having to work for someone else under a structured setting. Again, Mr. Dao elaborates:

“I am my own boss. I can go to work whenever I want to. Except for a few things which have deadlines and are at times pressing, I can go in at any time. Of course, I have to work and find new clients in order to survive but I have built a core group of clientele that keeps me busy. I don't have to work for anyone else, it's more pleasant and less stressful. I no longer have to show up

at a definite time everyday. I don't have to do this and that for other people.”

But the owners can achieve both of these benefits outside of the ethnic enclave economy. However, as a result of the lack of oppotunities for employment in the general labor market, the owners adapted to the structural conditions by creating a niche to fill in this ethnic enclave. Therefore, perhaps the third and more crucial benefit resulting from this adaptation process is the social status that they are given in the community. They are considered as the leaders of and for the community, where they are well-respected and well-liked.