Chicago's Economic Divide: New Report Highlights Racial Wealth Inequities

Study unveils significant racial, ethnic disparities in wealth, economic opportunities in Chicago

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CHICAGO — A recent study by The New School’s Institute on Race, Power and Political Economy, in collaboration with the Chicago Community Trust, reveals profound economic disparities along racial and ethnic lines in Chicago. The findings underscore the significant influence of race and ethnicity on homeownership, access to financial tools, incarceration rates, and the impact of the COVID-19 pandemic.

According to Darrick Hamilton, a leading economist and the founding director of the Institute on Race, Power and Political Economy, wealth is a crucial determinant of success, not just in Chicago, but across the American economy. He asserts that wealth is a politically determined variable, suggesting it can be modified through deliberate policies.

“You have to design, manage, and implement policies that include Black and Indigenous people,” Hamilton said. “Without such intentionality, the political economy will continue to exclude these groups. The narrative that success is solely a result of personal effort has never been true for any group. Our dominant framework suggests that obtaining a college degree, finding a partner, and avoiding trouble leads to social mobility and wealth security. However, the reality is far more complex.”

The report, titled “Color of Wealth in Chicago,” provides a detailed breakdown of the median net wealth of various racial and ethnic groups in the city. It reveals stark contrasts: white families have a median net wealth of $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 study also addresses the city’s history of discriminatory practices, such as redlining, racial covenants, restricted access to banking services, and predatory lending, which have significantly impacted the wealth accumulation of Black and other communities of color.

Hamilton highlights the persistence of wealth disparities even among Black families who have followed the conventional pathways to success.

“Education, dual-family households, and avoiding incarceration are associated with better outcomes,” Hamilton said. “However, the wealth generated from these activities is not significant for Black people. Disparities not only persist but also widen at higher economic levels. Shockingly, Black families who have done all the ‘right things’ often have less wealth than white families at the lowest economic strata, such as those without a college degree.”

Hamilton also pointed out that white families have historically benefited from policies designed to create generational wealth.

“We know which policies can generate wealth,” Hamilton explained. “Policies that created a middle class and enabled wealth accumulation for white families did not happen by accident. Chicago has a deep history of seeding capital and providing homeownership infrastructure that allowed capital to grow. The problem lies in the exclusion of certain groups from these opportunities.”

The report calls for intentional and inclusive policy design to address these disparities and ensure that all communities have equal opportunities to build wealth. It suggests that without targeted interventions, the economic divide will continue to grow, leaving marginalized communities further behind.