New report says Chicago’s economic policies are hurting minorities

A brand new report from The New School’s Institute on Race, Power, and Political Economy, produced in partnership with the Chicago Community Trust, finds that race and ethnicity have significant impacts on homeownership, access to financial tools and resources, incarceration rates, health care and education debt, and the impact of the COVID-19 pandemic in Chicago.

In line with the glaring economic disparities exist along racial and ethnic lines in Chicago. The Color of Wealth in Chicago Study Highlights median net value 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 Chicago’s history of discrimination against black people and other people of color through practices akin to redlining, race-based clauses, limited access to banking services akin to checking and savings accounts, and predatory lending services that trap borrowers in cycles of debt through high-interest, unsecured loans.

According to Darrick Hamilton, a number one economist and founding director of the Institute on Race, Power and Political Economy, wealth — or lack thereof — is a key consider determining success, not only in Chicago but across the American economy. Hamilton argues that wealth is a politically contingent variable, meaning it will possibly be modified or influenced through targeted policy.

“You have to design, manage and implement policies in a way that includes Black, Indigenous people because without that intentionality, the reasons we have this wealth inequality is because of the political economy that’s been built to exclude,” Hamilton said. “We know that the bootstrap narrative has never been true for any group. Our dominant framework is that if you just get a college degree, find a partner and stay out of trouble, that’s not only a path to social mobility, but also to the security that comes with wealth.”

Hamilton added within the report: “Now, there’s no question that two-parent education and no incarceration are associated with better outcomes. But in terms of wealth, the value for money of these activities for blacks is not a big gradient. The disparity persists and deepens at the higher social strata. And here’s another point that may be shocking: black families who do all the ‘right things’ tend to have less wealth than white families who end up at the lowest social strata, namely without a college degree.”

Hamilton also spoke about how white people are often the beneficiaries of targeted policies that contribute to the creation of wealth that’s passed on to subsequent generations.

“We know the policies that can create wealth,” Hamilton told . “We did it for white people, we created a middle class where a significant portion of them were able to generate wealth and pass it on from generation to generation. That group didn’t emerge on its own. Chicago is deep in the historical paths and in raising capital and then providing the infrastructure of homeownership to allow that capital to accumulate. So we know how to do that. The problem is we’ve excluded certain people.”