The term middleman minorities, coined by Hubert Blalock (1967), refers to minority entrepreneurs who mediate between the dominant and subordinate groups. Their customers are typically members of marginalized racial or ethnic groups that are segregated from the majority group.
EARLY DEVELOPMENT OF MIDDLEMAN MINORITIES
Edna Bonacich’s article "A Theory of Middleman Minorities" (1973) remains the seminal work on the topic. Bonacich offers an explanation for the development and persistence of middleman minorities as minority groups serving an intermediary position between the majority group and other segregated minority groups. She notes several commonalities among various middleman groups (e.g., Armenians, Indians, Chinese, Japanese, and Jews) in selected occupations (e.g., bankers, barbers, brokers, launderers, and restaurateurs). A key characteristic for Bonacich is the tendency of middleman minorities to be sojourners—people who intend to return to their country of origin.
Because they are sojourners and their migration is economically driven, middleman minorities are thrifty while amassing capital. Moreover, they maintain strong ties with their compatriots in the host and origin countries while remaining detached from the host society. In short, middleman minorities have little incentive to develop ties to the host society. Furthermore, they tend toward businesses in which assets are quickly accumulated and liquidated.
Due to their sojourner status and their strong in-group ties, middleman minorities develop a competitive business edge. In particular, these entrepreneurs minimize their labor costs through their reliance on family members and fellow ethnic workers willing to work long hours for little pay. These circumstances allow middleman minorities to establish positions of economic dominance.
Their success places middleman minorities in conflict with different sectors of the host society. Entrepreneurs from other groups cannot readily compete with the middleman minorities’ cheap labor. Also, workers in the mainstream labor force view the workforce of middleman minorities as a threat to their own ability to negotiate higher wages and better working conditions. Finally, the minority clientele of middleman minorities resent them for not hiring members of their group and for not being vested in their communities.
Consequently, their success as entrepreneurs creates a paradox. Middleman minorities sometimes abandon their intentions to return to their country of origin, transition-ing from sojourners to settlers. As settlers, they tend to become more integrated into the host society, a fate of many Jews, Chinese, Indians, and Japanese in the United States (Bonacich 1973). However, due to continued antagonism from the host society some middleman minority groups remain perpetual middlemen, maintaining their sojourner intentions and residential separation (Blalock 1967).
CULTURE, BLOCKED OPPORTUNITIES, AND MIDDLEMAN MINORITIES
Bonacich (1973) posits that the culture of the country of origin is important in the development of middleman minority. She asserts that the cultures of some groups tend to predispose them to the role of middleman minorities, regardless of location. Similarly, Thomas Sowell (1996) highlights the role that culture plays in the entrepreneurial activities of middleman minorities such as Chinese and Jews.
While culture may be an important ingredient in the formation of middleman minorities, blocked access to opportunity structures represents an equally—if not more—important component in the making of middleman minorities. Traditional middleman minorities have experienced discrimination and hostility in different parts of the world. For example, during the "coolie" period in the United States, segregation laws during the nineteenth century hindered Chinese immigrants from learning English and the dominant group’s culture and norms (Wang 1991; Ha 1998). Sowell (1996) also describes the discrimination and violence directed against Chinese in gold rush communities. Chinese were also barred from immigrating to the United States and from becoming citizens. Due to virulent anti-Asian sentiment, Chinese clustered in enclaves where they fended for their survival. Even today, Asians fail to receive appropriate returns to their educational levels in the labor market, with many opting to become entrepreneurs, increasingly in black neighborhoods (Min 2002).
RECENT DEVELOPMENTS REGARDING MIDDLEMAN MINORITIES
The conceptualization of middleman minorities has some shortcomings today. For example, the term generally describes the experiences of certain immigrant groups historically. The extent to which the perspective can be fully applied to immigrant groups now is open to debate. Furthermore, the emphasis on sojourning requires some adaptation, as many middleman minorities in the United States have settled or intend to settle in this country while others are transnational migrants, maintaining ties in the countries of origin and destination.
Since the appearance of Bonacich’s 1973 article, there have been shifts in immigration patterns to the United States, with some groups especially likely to become entrepreneurs (e.g., Cubans and Koreans). Due to the diverse experiences of such groups, other terms have emerged to capture their varying realities. For instance, ethnic enclave describes a geographic setting where ethnic groups are concentrated (see Portes and Rumbaut 1990). The term captures the economic, social, cultural, and language activities associated with ethnic concentrations. With respect to ethnic entrepreneurial activities, the main distinction between "ethnic enclave" and "middleman minorities" concerns the ethnic background of the clientele and the residence of ethnic entrepreneurs. Middleman minorities share neither an ethnicity nor a residential area with their clientele: they typically live outside of the neighborhoods where their segregated minority clientele live. In contrast, ethnic entrepreneurs in ethnic enclaves share an ethnicity and residential area with their clientele. Thus, ethnic entrepreneurs are members of the neighborhoods where their businesses reside. Two groups illustrate these concepts. Korean business owners serving predominantly African American areas in Los Angeles exemplify middleman minorities. Cuban business owners in predominantly Cuban areas in Miami illustrate ethnic entrepreneurs in ethnic enclaves. For further discussion regarding these terms see Feagin and Feagin (2003).
In sum, despite the changing nature of immigration and the context in which immigrants exist in the host society, the term middleman minority endures. An analysis of the entries in Sociological Abstracts suggests a general increasing usage of the term since its inception (1960— 1969, 0.3 average annual entries; 1970-1979, 1.4; 1980-1989, 2.9; 1990-1999, 3.9; and 2000-2005, 2.8).
The continued changing nature of immigration and racial/ethnic relations is likely to result in future modifications to the conceptualization of middleman minorities.
