Within Chicago, IL, wealth inequity is driven by historical oppression, lack of equitable opportunity, and exclusion.

Historical Oppression

For every $1 of wealth accumulated by white families, people of color (POC) hold just one cent ("The Wealth Gap: Facts," 2022). This stark disparity illustrates the racial wealth gap in the United States and its impact on economic participation. Two key factors influence the ability of POC to engage in their local economies:

- Financial Health: The capacity to spend, save, borrow, and plan to ensure resilience and pursue opportunity.

- Financial Vulnerability: The lack of ability to spend, save, borrow, and plan, resulting in limited resilience and opportunity. (Financial Health Network et al., 2023) In Chicago, financial inequity disproportionately impacts communities of color (COC):

- 23% of Chicago residents are financially vulnerable, 1.5 times the national average.

- Black residents achieve financial health at a rate of 13%, and Latinx residents at 16%, compared to 49% of white residents. (Financial Health Network et al., 2023)

Lack of Equitable Opportunity

Financial capital, income, and equity inequities disproportionately impact Chicago COC:

“[Minority owned businesses] experience higher loan denial probabilities and pay higher interest rates than white-owned businesses even after controlling for differences in credit-worthiness, and other factors” (Romer, 2022).
“During the COVID-19 pandemic, federal economic recovery investments (e.g. PPP loans) left most business owners of color without help” (Hunt et al., 2021).
“There is a $220 billion annual disparity between Black wages today and what they would be in a scenario of full parity” (Hunt et al., 2021).
“Over the past 30+ years, workers of color have experienced income disparity across all wage categories” (Hunt et al., 2021).

Exclusion from Economic Investment

Despite the urgent need, COC are excluded from economic investment. Within Chicago, IL, 51% of West Pullman residents and 54.1% of Roseland residents earn below the area median income (Bink, 2022; Chicago Metropolitan Agency for Planning, 2023). Yet, both communities were excluded from $14,000,000 in Chicago tax dollars designated for community wealth building (Community Wealth Building Initiative, 2022). Many POC entrepreneurs are also excluded from investment opportunities. Around 80% of Black and LatinX entrepreneurs are unable to get access to sufficient equity capital for their ideas, compared with 46% of their White counterparts. The result is an estimated $146 million equity capital gap” (Johnson et al., 2022). This follows a long history of inequitable economic investment within COC (Balta & Balta, 2022)

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