Summer 2020
August 24, 2020
Stop and think about these numbers for a second.
In Chicago in 2018, Black adults...
...had less than half the median income of white adults ($34k vs. $88k).
...were only a third as likely as white adults to have a bachelor’s degree (21% to 64%).
...had a life expectancy a full 9 years lower than white adults (71 years to 80 years).
These numbers are shocking. But they didn’t happen overnight, and they didn’t happen by accident. As a recent piece in the Chicago Tribune makes clear, these stark inequalities stem from express policies that have deeply racist roots.
The article traces how widespread inequalities in Chicago were fomented by specific policies, sharing many shocking statistics like those above. For example:
— The concentration of Black and Latino citizens in specific communities can be traced back to housing policies that disallowed selling homes to people of certain races and ethnicities.
— Poor urban planning policy has resulted in a lack of reliable transportation for people living in many Black and Latino neighborhoods, which exacerbates issues with access to employment, food, and other necessities.
— Healthcare policies have made it difficult for people in many Black and Latino neighborhoods to access hospitals and pharmacies.
— School funding policies based on enrollment have created a vicious cycle in schools serving Black and Latino students, in which they see less money, which results in diminished services, which results in students leaving the school—thus starting the cycle of less funding all over again.
So what do these policies have to do with financial education? A lot.
All of these policies have explicitly benefitted white people over Black and Latino people, resulting in very different economic environments to this day. Exploring how different people have different contexts in which to make financial decisions is a key part of the finEDge curriculum. Discussing the historical antecedents of these different contexts can enhance understanding of the role of economic environment in financial options and decisions.
Additionally, it is clear that financial institutions have a heavy hand in shaping many of these policies, to the detriment of Black and Latino communities. Pharmacies and clinics don’t set up shop in Black and Latino communities because reimbursements from private insurers (common in white communities) are higher than those from public insurers (common in minority communities). Food deserts, or areas with lack of access to fresh and healthy food, are common in Black and Latino communities because grocery stores don’t open and stay there. Financial players react to historical precedent in order to make more money, and the result is further inequity.
Finally, it is important to illustrate for students that racism isn’t just about an individual’s thoughts and feelings. It’s about systemic problems in institutions that favor white people over people of other races and ethnicities. Relatedly, it is important for students to know that experiencing financial struggles may not be due to personal failings, but instead due to these systemic problems. Knowing that struggles may not be personal, but instead the result of implicitly racist institutions, has been shown to improve students’ self-efficacy and ability to navigate unjust financial systems.
In the wake of recent protests over racial injustice, your students may be contemplating how they are affected by or perpetuate racism. In the financial education classroom, you can have students examine how structural and institutional policies benefit some at the expense of others, and the financial motivations and outcomes related to these policies. By understanding these policies and their implications, your students may be better equipped to change them going forward.