A new report from The New School’s Institute on Race, Power and Political Economy, in partnership with the Chicago Community Trust, reveals that race and ethnicity significantly influenced homeownership, access to financial tools and resources, incarceration rates, medical and education debt, and the impact of the COVID-19 pandemic in Chicago.
According to the Chicago Tribune, stark economic disparities exist along racial and ethnic lines in Chicago. The “Color of Wealth in Chicago” study highlights the median net wealth
of different groups: white families ($210,000), Black families ($0), U.S.-born Mexican families ($40,500), foreign-born Mexican families ($6,000), and Puerto Rican families ($24,000). The report also addresses the City of Chicago’s history of discrimination against Black and other people of color through practices such as redlining, racial covenants, limited access to banking services like checking and savings accounts, and predatory payday loan services that trap borrowers in cycles of debt with high-interest unsecured loans.According to Darrick Hamilton, a leading economist and the founding director of the Institute on Race, Power and Political Economy, wealth—or the lack of it—is a crucial determinant of success, not only in Chicago but across the American economy. Hamilton argues that wealth is a politically determined variable, implying that targeted policies can alter or influence wealth.
“You have to design, manage and implement policies in such a way that Black people are included, Indigenous people are included, because without that intentionality, the reasons why we have this wealth inequality is a political economy that is built to exclude,” Hamilton told the Chicago Tribune. “We know the bootstrap narrative has never been true for any group. Our dominant framework believes if you simply get a college degree, find a partner, and stay out of trouble, that not only is that a pathway to social mobility, but also to the security associated with wealth.”
Hamilton added, “Now, without a doubt, education in dual-family households and not
being incarcerated is associated with better outcomes. But when it comes to wealth, the bang for the buck of those activities for Black people is not a large gradient. The disparities persist and widen at higher strata. And here’s another point that may be shocking: Black families where they have done all those ‘right things’ have less wealth, typically, than white families that are at the lowest strata in our society, namely without a college degree.”Hamilton also discussed how white people were often the beneficiaries of targeted policies that created generational wealth.
“We know policies that can yield wealth,” Hamilton told the Tribune. “We
did it for white people, created a middle class where a good portion were able to generate wealth and pass it down from one generation to the next. That group didn’t emerge on its own. Chicago’s deep in historical pathways and of seeding capital and then providing a homeownership infrastructure to allow that capital to accumulate. So we know how to do this. What is problematic is that we have excluded certain people.”RELATED CONTENT: How Redlining And Banking Impact Generational Wealth