A new study released Monday finds deep-rooted wealth inequities based on race, ethnicity and immigration status in Chicago and 10 counties, including DuPage, Kankakee and McHenry.
The “Color of Wealth in Chicago” report gathered data during parts of 2022 and 2023. White families reported a median net worth of $210,000 compared to what U.S.- born Mexican families reported, which is $40,500. Black families reported no wealth at all. Puerto Ricans reported a median net worth of about 11% of the wealth of the typical white family. Immigrant families’ median net worth amounted to about 3%.
Researchers from the Institute on Race, Power and Political Economy at the New School in New York City, analyzed surveys from about 1,500 respondents across racial and ethnic groups. The study collected other data, including income, debt and education attained among the same groups. The study is also part of a series of reports that has examined wealth and inequality across six other metropolitan areas in the country.
These wealth disparities, the study explains, are largely caused by public policy that historically excluded groups, particularly African Americans. Those policies include lack of access to home ownership, quality health care, predatory lending practices, limited access to education and jobs and lack of access to investment and retirement accounts.
The purpose of this study, which had the support of foundations, including the Chicago Community Trust and the Kresge Foundation, is to reveal the depths of inequality in Chicago.
“The reason we invested in this report and in others like it and will continue to do so is that we can’t afford to base our work and advocacy on assumptions. We need to have real facts,” said Andrea Sáenz, president and CEO of the Chicago Community Trust. “This allows us to really push back on those false narratives that wealth is a personal outcome.”
The study also explores the Chicago area’s long history with migration, going back to before the 1800s with white European migrants and later in the 1900s with Black Americans during the Great Migration. Both fueled Chicago’s exponential growth.
But as Black Chicagoans helped many parts of the city blossom culturally and economically, they were also subject to financial exploitation, intimidation and racial violence — challenges later faced by immigrants from Mexico in the mid-20th century.
“White migrants that came to Chicago were facilitated with capital and an infrastructure by which they were able to grow that capital and pass it down largely in the form of home ownership,” said Darrick Hamilton, an author of the study and professor of urban policy at the New School. “Whereas other migrants were excluded from that capital base. And when they were able to amass capital, it was vulnerable to predatory extraction.”
For homeownership, which is often the main asset in which wealth-holding Americans store and generate their wealth, Black survey respondents (34 percent) were the least likely to be homeowners. In contrast, white respondents (72 percent) had the highest rates of homeownership. Homeownership was more common among U.S.-born Mexican respondents (58 percent), foreign-born Mexican respondents (57 percent) and Puerto Rican respondents (50 percent).
In the survey, participants were asked about their wealth and specific assets, liabilities and financial resources. Access to liquid assets like cash, savings and money market accounts, as well as tangible assets and debt, were all factored into the study.
Respondents were also asked about employment and the impact of the COVID-19 pandemic, which had a dramatic effect among non-white participants. Mexicans had higher percentages of deaths among close relatives.
Participants in the study show similar national trends when it comes to educational attainment. White participants in the study also completed bachelor’s degrees at a higher rate than other groups — 45%. Foreign-born Mexicans have the lowest percentages — 9%.
Hamilton and other experts say some solutions include giving more people of color access to capital and Medicare.
Access to Medicare can help prevent medical debt. Hamilton also suggests guaranteed income programs to prevent predatory lending, such as payday loans.
Adriana Cardona-Maguigad covers immigration for WBEZ.