The Issue of the Racial Wealth Gap in Chicago

Disparities in education may provide some explanation for the racial wealth gap that exists in Chicago. Specifically, the process in which resources are allocated to different neighborhoods across the city widens the gap in educational achievement that may impact economic outcomes later in life. In Peter Hancock’s article, ‘Money Matters: How School Funding Inequities Affect Students, Taxpayers’, he states that in Chicago, “school districts with large amounts of property wealth were better funded than their property-poor counterparts, enabling them to spend more money per pupil”, which “ translated into higher test scores in math and English language arts” (Hancock). Since minority residents in Chicago are more commonly concentrated in areas with lower property wealth, then they are subjected to receive less funding for education when compared to more wealthy neighborhoods that are more populated by white people. The correlation between more funding and higher test scores demonstrates how significant and impactful funding is when it comes to a student’s education. If students in poor neighborhoods received more funding, then they can potentially perform higher on standardized tests and put them on a more steady path towards attaining higher education.

Furthermore, according to his article, there are substantial differences in standardized testing performance between low and high income students. He writes that “[a]t the high school level, being in a district at the top of the funding scale translates to 100 additional points on the SAT” and “[a]t the elementary level, students in districts that rank in the top 20% of the funding scale are more than twice as likely as students in the bottom 20% to meet state standards on math” (Hancock). Those with higher standardized testing scores will most likely find it easier to get into top universities that yield better student outcomes. The current method of school funding, giving more resources to districts with high property values, puts low-income students at a disadvantage when it comes to higher education which may impact their financial statuses later on in life.

Different opportunities for early childhood education may provide further reasoning for the wealth gap that exists in Chicago. The impacts of early childhood education is demonstrated in the Perry Preschool Project conducted in Michigan in which at-risk African American children were split into two groups: those who received high quality early childhood education and those who did not. Those students who were placed in better education “scored higher on achievement test, attained higher levels of education, required less special education, earned better wages, had better physical health, were more likely to own a home, and were less likely to go on welfare or be incarcerated than other children of similar backgrounds” (“Early Childhood Education Can Pay Big Rewards to Families, Society”). Low-income families may not have the resources to send their children to higher quality preschool compared to those who have higher incomes, and if the type of school has been shown to make a difference in a child’s life later on, then low-income children are put at a disadvantage. Higher wages and home ownership can increase the quality of life for many individuals and the influence of quality of preschool education demonstrates how some children cannot attain wealth as easily as their white counterparts.

The importance of preschool education is further demonstrated when observing the effects of the children of the test subjects within the experiment. According to the study, “new data found positive outcomes continued in the next generation” as from the subjects’ children, “60% were never addicted or arrested; and 59% were employed full-time or were self-employed” (“Early Childhood Education Can Pay Big Rewards to Families, Society”). They benefits preschool education had on future generations suggests that those who do not have the same quality of education do not have the same levels of success and wealth later on in life.

In Chicago, however, achieving higher levels of education can have a significant impact on one’s ability to accumulate wealth, but this is largely impacted by race. According to A Tale of Three Cities: The State of Racial Justice in Chicago Report by the University of Illinois at Chicago, “[s]lightly more than 40% of black and Latinx college graduates earn $30,000 or less compared to only 30% of their white peers. Meanwhile, 11% of white college graduates earn $121,001 or more, compared to only 2% and 3% of their black and Latinx peers” (Kasey et al). This data demonstrates that obtaining a higher degree does not necessarily mean that one will achieve a higher salary; education does not demonstrate a significant influence to the racial wealth gap in Chicago despite some success shown with previous data. Adding to that, the report also found that the “black-white employment gap is the smallest among those with a doctoral degree, but blacks with doctorates are still unemployed at almost twice the rate of their white counterparts' (Kasey et al). The existing gap in unemployment despite educational success suggests that disparities in educational achievement do not significantly influence the persistence of the racial wealth gap because if it did, then people with the same degrees would have more similar employment rates.

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Gentrification

The process of gentrification in Chicago provides further explanation for the persistence of the racial wealth gap. Gentrification is the process in which people are displaced from their neighborhood homes due to rises in costs of living from renovations that attract higher income residents. With rising housing costs, some residents have no choice but to move to different neighborhoods. In Carlos Bellesteros’ article Pilsen schools hollow out as neighborhood gentrifies, he states that in the Chicago neighborhood of Pilsen, a community undergoing gentrification, “one-person households rose by 30% and the number of two-or-more person non-family households nearly doubled from 2000 to 2017” and the median income in Pilsen “rose from around $35,000 in 2010 to $45,000 in 2017, adjusted for inflation” (Ballesteros). This information indicates that there have been more families with more dependents moving out of the neighborhood while those with higher incomes are pushing them away, as seen with the rise in median income over the years. From gentrification, families may find it increasingly difficult to find jobs within their community. Furthermore, the victims of gentrification are primarily minority residents. An article titled The frustrations are real: Pilsen anti-gentrification debate renewed after graffiti incident by Luisa Chu states that “10,000 Latino residents have left Pilsen since 2000” and “[i]n their stead, single, wealthier (often white) people have moved in” (Chu). The replacement of Latinx residents by wealthier white people demonstrates how gentrification targets minorities, putting them at a disadvantage when compared to their white counterparts.

People leave their homes primarily because they cannot afford to live comfortably in their homes with rising rents and costs of living, and Pilsen is not the only Chicago neighborhood that is being affected. In Bianca Sachez’s article, ‘A stranger in my own community: Mixed feelings as young Latinos move back into gentrifying neighborhoods', she states that “[f]rom 2012-2014 to 2015-2017, the share of affordable units in Logan Square, Avondale and Hermosa dropped 12 percentage points, according to the Institute of Housing Studies” and “the three neighborhoods witnessed a 9 percentage point decline in the share of renters that are low income and nearly a 7 percentage point increase in lower-income renters who live in unaffordable housing units” (Sanchez). This data demonstrates how it is becoming more difficult for low-income residents in Chicago to obtain affordable housing, putting them at an economic disadvantage. Since gentrification happens in densely populated minority neighborhoods, then minorities will continually be subjected to financial struggles when compared to non-minority residents from other neighborhoods.

Adding to the increase in housing prices and displacement, gentrification also has a negative impact on the public schools of gentrifying neighborhoods. In the Chicago neighborhood of Pilsen, “[n]ew families come to the neighborhood and increase the housing prices but don’t leverage their political capital to improve the local public schools because that’s not where many of them are sending their kids” (Ballesteros). If new residents do not send their children to the public schools in the neighborhood, then schools would be forced to close programs that are beneficial to students due to lack of student enrollment, and for Pilsen, lack of enrollment has already become a problem for its schools. According to an article by the CST Editorial Board’s article, Gentrification, affordable housing and the fight for Pilsen’s public schools, “[a]ltogether, Pilsen’s nine public elementary schools lost 40% of their students between 2005 and 2010” and “[b]ecause [Chicago Public Schools] largely funds schools depending on how many students enroll, Pilsen’s elementary schools have lost several teachers and educational programs in recent years” (CST Editorial Board). The lack of educational resources for Pilsen’s residents sending children to public school puts children at a disadvantage for life later on as education can lead to higher economic standing in the future. Meanwhile, the non-minority residents who chose not to send their children to these underfunded schools do not face the problem of a lack of funding and will have an advantage over their minority counterparts when it comes to educational attainment.

The gentrification of minority neighborhoods does not end at causing disparities in education as local businesses by minorities are put at risk. In the Chicago neighborhood of Pilsen, “retail establishments are replacing Mexican-owned-mom-and-pop stores with upscale restaurants, bars and cafes owned by White individuals or chains … and have been joined most recently by … expensive restaurants catering to younger and wealthier populations” (Chu). Minority businesses, a source of income for families, are being taken over by wealthier, white residents who move in as a result of gentrification. The catering to “wealthier populations” also demonstrates how gentrification is significantly impacting the demographics of gentrifying neighborhoods if businesses are no longer catering to the previous minority population that once resided in Pilsen. If the market in the community is limiting to original minority residents, then they will have financial struggles compared to white businesses that can survive under the changing demographic.

Conclusion

If the city of Chicago is supposed to be representative of our nation’s success in economic development, then the racial wealth gap should not be as prevalent as it is now in the city. Although education can lead to higher incomes, obtaining the same level of degree as a white person is still not enough for a minority to close the gap between the two groups; nevertheless, the current funding system for public schools in Chicago puts minorities at a disadvantage. Also, the difference in methodology for reducing drug presence in neighborhoods between urban and suburban areas leads to higher incarceration rates of black and hispanic people which negatively impacts a family’s income. Meanwhile, gentrification contributes to educational inequalities and harms local minority businesses. Stemming from the history of racial segregation and disrimination, the racial wealth gap is an important issue because it unjustly puts minority groups at a disadvantage in comparison to their white counterparts. Given the negative effects it has on minorities, there should be continuous government action to reverse the processes that are behind the continuation of the racial wealth gap in Chicago.