A groundbreaking report from The New School’s Institute on Race, Power, and Political Economy, in collaboration with the Chicago Community Trust, has cast a spotlight on the deep economic disparities that persist along racial and ethnic lines in Chicago.
This revealing study, titled “Color of Wealth in Chicago,” exposes how race and ethnicity play critical roles in determining homeownership, access to financial resources, incarceration rates, medical and education debt, and the far-reaching impact of the COVID-19 pandemic in the city.
The findings paint a troubling picture of economic inequality, also revealing a shocking disparity in median net wealth among different racial and ethnic groups. White families hold a median net wealth of $210,000, while Black families have a median net wealth of $0. U.S.-born Mexican families have a median net wealth of $40,500, foreign-born Mexican families $6,000, and Puerto Rican families $24,000.
These numbers starkly illustrate the economic difficulties that exist between different communities in Chicago.
Historically, Chicago has a legacy of discriminatory practices against Black and other people of color. Redlining, racial covenants, limited access to banking services, and predatory payday loan services have all contributed to trapping these communities in cycles of debt and economic disadvantage. These systemic barriers have made it exceedingly difficult for marginalized communities to build and sustain wealth.
Darrick Hamilton, a leading economist and the founding director of the Institute on Race, Power, and Political Economy, emphasizes that wealth—or the lack thereof—is a crucial determinant of success, not only in Chicago but across the American economy.
Hamilton argues that wealth is a politically determined variable, which can be altered through targeted policies designed to include marginalized communities. “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.
Hamilton challenges the commonly held belief in the “bootstrap narrative,” which suggests that simply obtaining a college degree, finding a partner, and avoiding trouble is a sure pathway to social mobility and financial security. He points out that while these factors may lead to better outcomes, they do not significantly close the wealth gap for Black families.
“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 said.
The report underscores how historical policies have favored white people, enabling them to build and pass down generational wealth. “We know policies that can yield wealth,” Hamilton explained. “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.”
The Color of Wealth in Chicago report serves as a crucial wake-up call, providing a detailed roadmap of the structural changes needed to address these deep-seated inequities within the city of Chicago.