After Andrew Young criticized immigrant-run "mom-and-pop" shops for exploiting blacks, a bit of a hubbub erupted over the possible bigotry of his comments. He argued that these races were exploiting blacks, who didn't, you'll notice, seem to own any of the stores. Steven Teles, however, disputes that this is a racial issue:
let's take three categories of small businesses that immigrants tend to concentrate on: corner shops, dry cleaners, and doughnut shops. What do all these have in common? First, they are very low margin enterprises. They are only profitable if you can drive hourly wages down very low. This is possible if you engage in what I call (and refer to in my co-edited book called Ethnicity, Social Mobility and Public Policy in the US and UK, available to your left) "self-exploitation." These are enterprises that work mainly if you can make yourself and your family the labor pool, and make up for low average hourly wages with extremely long hours, both on the part of the owner and their family (whose labor is not directly compensated and not taxed).
These type of enterprises don't work for African-Americans for two reasons. First, their reserve wage is above the (very low) effective hourly wage that these enterprises provide. Second, given their family structure, most African-Americans don't have recourse to uncompensated family labor. There's also a third factor, which is access to capital--many of these enterprises are originally capitalized through rotating capital arrangements, which depend on the high level of social trust that comes from fairly tight-knit immigrant communities. A more speculative fourth factor is that these enterprises often work because consumption among the relevant immigrant groups is often highly suppressed--closer to the level of their countries of origin than the US norm.
That said, bodegas really are terrible ways to get your groceries. I lived next door to one for awhile and the fruit was continually rotten, the milk often spoiled, the cereal overpriced and near expiration, and the healthful options nonexistent. That they survive at all is not a commentary on immigrant greed but on the lack of decent supermarkets and food suppliers willing to open into impoverished areas.
