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EDITOR’S NOTE - Blacks in the inner city of Los Angeles h

August 2, 1992

EDITOR’S NOTE - Blacks in the inner city of Los Angeles have long been stuck on the sidelines as new generations of immigrants moved ahead to become business successes in America. When Los Angeles burned, rioters struck at the latest group to pass them by - Korean merchants. Part II of ″Separate Nations″ examines the barriers blacks face in becoming their own bosses.

Undated (AP) _ By JAMES ANDERSON Associated Press Writer

LOS ANGELES (AP) - John Murray sweated and struggled to succeed as a liquor store owner and a landlord. He overcame many obstacles - one of the biggest being his skin color.

In 30 years in the inner city, Murray has witnessed one ethnic group after another make it in America. He has seen Jewish merchants prosper. Then Koreans. But he has seen other blacks squeezed out.

″It’s amazing to me how anybody can come into this community and go into business,″ he said. ″Everybody but blacks.″

″I have never had a line of credit - even after owning property and having $100,000 in the bank,″ said Murray, 64, who once owned two liquor stores. ″I’ve had to borrow against my own money in the bank.″

Murray has fought racism, trying to secure loans for himself and organizing boycotts for others so more black salespeople would be hired in the liquor industry.

Now he may be a victim of racism again - indirectly. A building he owned and leased to a Korean who ran a liquor store was gutted in the recent riots. It was among hundreds of Korean businesses damaged or destroyed.

Some experts say the targeting of Koreans shows the resentment blacks feel, thinking they’re being left behind while another immigrant group climbs its way up to the middle class. The riots revived an old question: Why are blacks stuck in America’s melting pot?

Some say it’s racism. Others say the answers are far more complex.

″Blacks have paved the road for all minority groups, but the newcomers are taking advantage of the opportunities,″ said Edward Chang, ethnic studies professor at the University of California-Riverside.

″Blacks feel squeezed out,″ he said. ″The Koreans became a symbol of oppression.″

Experts say that limited access to credit, loans, affordable insurance and money in the inner city has stunted the growth of a black entrepreneurial class. They argue that those who cite immigrant successes when addressing inner city blacks are ignoring the special needs of urban residents.

″There is a tendency on the part of government leaders to use (immigrant successes) as an excuse,″ said John Mack, president of the Los Angeles Urban League. ″It’s a hard, cold reality that people are denied opportunity because of the color of their skin.″

A 1991 Federal Reserve study of mortgage loans, for instance, showed blacks were twice as likely as whites to be rejected for home loans.

When it comes to business, there’s a widespread perception that clannish Korean immigrants have succeeded in the United States by pooling their cash in an informal, revolving credit association known as the kye.

But a forthcoming Urban Institute study, ″Urban Labor Markets and Job Opportunity,″ says household capital, job experience, training and education determine the rate of small business ownership for minorities.

The study found the same held true for Chinese and Hispanic immigrants in New York City.

Korean store owners in Los Angeles, New York, Philadelphia and other cities usually are well-educated, from middle- and upper-class backgrounds, have substantial savings and access to Korean bank capital, Chang said.

Like their black predecessors, he said, Korean merchants work backbreaking hours and rely on unpaid family labor to make profits. They use the kye (pronounced ″keh″) most often when cash is short, not to launch businesses.

Korean store owners also help newcomers by sharing information and technical skills much more than other groups, notes UCLA sociology professor Roger Waldinger. But, he said, their poor English language skills are a handicap to professional work.

Unlike Koreans and other ethnic groups, Waldinger said highly skilled, educated blacks generally work in the fields for which they’re trained - not grocery stores.

Many blacks bought businesses in the late 1960s from South Central’s Jewish merchants, using Small Business Administration loans and savings from manufacturing jobs, which disappeared by the thousands in the ’70s and ’80s.

Up to the late 1970s, perhaps 70 percent of South Central’s liquor and grocery markets were black-owned, Murray said. But shop owners saw their margins dwindle when the government deregulated liquor prices in 1978.

Many already had sent their children to college and tired of long hours and high crime rates, they looked to sell. The Koreans were looking to buy.

Murray operated his liquor stores for about 15 years in the South Central area, which was ravaged in the recent riots.

He opened his first store in 1960 and confronted racism head-on when he was denied a $4,000 loan.

″I knew it was because of my color because I went back and told them I wanted to buy a Cadillac and they approved the loan,″ Murray said.

He survived the Watts riots of ’65 with a pistol at his side. He has faced robbers seven times.

In the late ’60s, he formed an association of black liquor store owners, boycotting distributors and forcing them to increase their numbers of black salespeople.

In the mid ’70s, Murray called it quits. He sold one store to a church, the other to a black man who went bankrupt. That store was taken over by a Korean merchant.

Murray says blacks can learn from Korean entrepreneurs.

″We are the kind of people who buy from anybody. We need to be more clannish and support black businesses,″ he said. ″They form these clubs. I wish we would do some of that.″

One program, Recycling Black Dollars, a non-profit group, was created in Los Angeles in 1988 to get blacks to invest in one another. President Muhammed Nassardeen estimates area black-owned financial institutions hold only $450 million of the estimated $9 billion in area black assets.

Other efforts are being made to help black businesses.

Black activists recently halted several post-riot demolition projects to demand that the work go to black contractors.

The Urban League also hopes to resurrect a program that trained black youths to run their own businesses and gave them seed money. The program was scuttled after state funding lapsed.

The riots also nudged government into action.

Congress is considering $2.5 billion in tax breaks to lure businesses to the cities and $500 million a year for job training, education and other programs.

And Housing and Urban Development Secretary Jack Kemp promises $137 million will be spent this year in Los Angeles to modernize public housing, create jobs and make loans to launch minority-owned businesses.

Murray, however, has seen the promises before.

Now living in View Park, an affluent hamlet southwest of downtown Los Angeles, Murray says he will rebuild only if he has a long-term tenant - and an SBA loan. His insurance company has offered $173,000 on his $200,000 policy, citing depreciation.

″I’m going to be 65 this September and my wife will be 65 next September,″ he said. ″I’ve made some investments, but I need that rental income. I’ve got some tough decisions to make.″

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