Financial and Economic Reparations

Financial and Economic Reparations

Chicago: A City of Contradictions

Chicago, Illinois is a prominent—if not the most prominent—city in the Midwest of the United States. Historically, it served as a frontier city for the Old Northwest, paving the way for expansion into Missouri and the rest of the continent. In the modern age, it serves as both a cultural hub and, in its own right, as an important figure in America’s urban landscape. The city is filled with notable museums, is home to one of the nation’s most prestigious economic and business universities, boasts of several major sports teams, and has a wealth of personality. On a personal level, it is my home. I am a product of its culture, its rhythm, its feeling. Most of my extended family speaks with a Chicago accent. We are very Irish, and Chicago has a high Irish population (in my mind, family and Chicago culture are the same thing). I am, therefore, deeply sentimental regarding the city’s value, heritage, and place in American society.

Contained in Chicago, however, is a continuing problem. Economic disparity, fueled by both the remnant of a more racially divisive age and the mass migration of white middle-class families to outlying suburbs, is rampant in the greater Chicago area. That disparity has led to a cycle of multi-generational poverty, which in turn affects the opportunities of minority groups to obtain such things as education, high-wage jobs, and even the chance to leave the neighborhood or town he or she grew up in.

History of Minority Migrations to Chicago and Resultant Economic Disparity

The problem of economic disparity in Chicago’s neighborhoods and closer suburbs has historical roots. In an outstanding book exploring the migration of African Americans to northern cities, historian Isabel Wilkerson argued that Blacks, seeking to escape from the oppressive Jim Crow laws of the United States, headed north toward industrial centers. “They did what human beings, looking for freedom, throughout history, have often done,” she wrote. “They left.” This migration led to the establishment of African American communities in the early 20th century. The most famous of these neighborhoods was undoubtedly Harlem, New York, which served as the birthplace of a cultural renaissance within the Black community. David Shi noted that during the second wave of minority migrations to urban locations that followed World War II, “more than 5 million blacks left the South in search of jobs, higher wages, decent housing, and greater civil rights.” Shi also observed that by “1960 . . . more African Americans were living in urban areas than in rural areas,” noting that this was the first time in history such a phenomenon had occurred. While many Blacks continued to face discrimination in some form or another, they, for the most part, found their lot had improved by heading north.

The migration, however, had an effect on the white families already living in urban areas. Almost concurrent with the Great Migration, suburbs began to spring up. Pioneered by the New York real estate developer William Levitt, suburbs provided the fulfillment of a dream for an ideal living situation—affordable housing within commuting distance of urban areas. White middle-class families flocked to them in droves, leaving cities almost as soon as black families arrived from the South. Racial tensions almost definitely played a role in the development of suburbs. The desegregation of schools prompted white families to move to districts where no black families would be present. Moreover, the suburb communities themselves were becoming more and more monoracial. Levitt’s idea for his own suburb, Levittown, for example, was initially designed with the intent of providing homes for only members of the Caucasian race, thus allowing white communities to exist in their new, finely-appointed apparel while Blacks were left in the cities. While the Supreme Court ruled in Shelly v. Kraemer (1948) that racial limitations of that kind were unconstitutional, the reality remained much the same effect: discrimination couched in legitimizing legal jargon.

David Shi said that “suburbia met an acute need (affordable housing).” His commentary is accurate when measured against what a white middle-class family could afford. The reality for black families was not the same. Less than a hundred years had passed since the emancipation of slaves during the Civil War and the abolition of slavery in the United States. Since that time, African Americans had been subjected to the humiliation of tenant farming and sharecropping, had borne the indignation of Jim Crow laws in the South, and in many instances, fared little better than they had as slaves. Blacks arrived in areas like Chicago with little money, hoping for better conditions and more opportunity for economic advancement but were faced with the burden of dying city culture as the center of social and living activity. This “trading of places,” where impoverished Blacks moved to cities as middle class families moved to the suburbs, is one of the ultimate causes of low-income, impoverished, and often dangerous neighborhoods such as the infamous “South Side” and “West Side” of Chicago. Interior suburbs, which are little more than extensions of the city itself, also face issues of poverty.

Economic Disparity and Minority Communities in Modernity

Economic disparity continues to be a severe and current issue. In a report on disparity in investment flows in Chicago, Brett Theodos and his colleagues noted, “Capital has flowed inequitably to communities across the U.S. for decades, often with a racialized motivation, or even when unintended, a racialized effect.” That effect is apparent when one examines the income disparity between white communities and minority communities. Crime rates are higher and education levels are lower. A report provided by Dr. Carol Caref to the Chicago Teachers Union revealed that “88 percent of students affected by CPS [Chicago Public Schools] since 2001 are African American. Schools more than 99 percent students of color (“Apartheid Schools”) have been the target of CPS school actions—representing more than 80 percent of all schools.” The idea that inner cities are as monoracial as suburbs, illustrated by Caref, was also echoed in Theodos’s study. Theodos suggested that Chicago’s levels of segregation—whether intentional or not—are so high, that if the city even had median numbers when compared to the rest of the country, “annual Black per capita would be $3,000 higher.” Clearly, the racial dynamics at play in the 20th century have enormous bearing on the economic condition of Black communities in the 21st century.

As the middle class in Chicago has continued to shrink, the lower class has grown—an atypical trade-off when compared with most other urban areas. The growth of the lower class comes from affluent residents of Chicago moving to outer suburbs of the city, typically to the northwest and southwest. While typically white families are able to either move outside of the city or (for the wealthy 1% of the city’s population) live in wealthy communities in the city proper, 21% of the city lives beneath the poverty line. The physical distance between these geographical areas is remarkably small. Communities like Oak Brook, which have a median yearly household income of $150,000 are only blocks away from communities like Austin Boulevard, which has a median yearly household income of only $20,000. Oak Brook is a primarily white community, while Austin is mostly Black. An article published in the Chicago Tribune in 2013 mentioned that the combined funds of a government grant and private efforts—a total of $47 million—were used to refurbish, rebuild, and revitalize Chicago communities. Despite Austin’s role as “the city’s largest and most populous community,” Austin did not receive any of the funds, attention, or benefit of this financial influx. The reality of the situation for Black communities such as Austin is undeniable evidence of Theodos’s claim that racial effects are the result of unequal capital investments.

Poverty is not easy to fight—those who are born in poverty face an uphill battle. It is often said that it is more expensive to be poor than it is to be wealthy. Education is stunted because of a lack of funding both from the government and from the students and their families themselves. It is difficult for parents to pay fees for field trips, books, supplies, and other educational fees when they are also trying to pay rent on apartments or repair old vehicles. Food is more expensive in the city. Homes are usually rented, not owned, so families who live in these communities do not accrue wealth. The American Dream envisioned by Levitt, of self-reliance and independent wealth, is little more than a pipe dream for most minority families living in the city. The issue is the accruement of wealth. Building wealth requires investment. Investment requires money in some form or another. Investing in minority communities can lead to more wealth for minority families, which, in turn, would lead to less disparity in GDP across racially segregated communities.

Solving Neighborhood Economic Disparity in the Chicago Region

Wealth disparity in communities of the 21st century is the heir to the racial prejudices and discriminatory practices of the 20th century, which in turn, was the heir to the institution of slavery. The financial burden of minority communities is the burden of the nation. In order to provide equal opportunities for all people and all races, the resources for building wealth must be provided to minority communities. Therefore, a solution to the problem of economic disparity is for the government to assist minority families in impoverished districts by giving them the means to build wealth.

Evanston, Illinois, one of Chicago’s suburbs, recently approved a Local Reparations Restorative Housing Program, “the first initiative of a city reparations fund,” which was established in 2019. The program is focused on “preserving, stabilizing, and increasing homeownership, which builds intergenerational wealth among Black/African American Residents.” The target group of African Americans is significant. Other minority groups in the Chicago area, such as Asians and Muslims, are (financially speaking) significantly more stable than Black communities. Latino communities often mirror Black communities but still have a slightly wealthier financial background. The economic impact of the Great Migration of African Americans from Southern regions in the early to mid-20th century is particularly visible in the wording of the memorandum. The focus on building inter-generational wealth is important. As discussed above, wealth-building is a critical component of financial success and a higher quality of life. To further the aim of building this wealth, eligible individuals can receive up to $25,000 in government aid. That aid can be used to accomplish one of three things: the purchase of real estate within the city; the repairs or equitable investment in property currently owned; or the payment or mortgage principal, interest, or fees.

The proposal adopted by Evanston raises, of course, the concern of funding. The funding comes from private investments and a 3% cannabis tax (following the legalization of marijuana use in Illinois in 2020). While the budget was initially set at $400,000, the Reparations Committee to the City Council has the ability to request more funds from the city should the demand outstrip the supply of money. Evanston’s population is around 75,000 people. It should also be noted that the town is relatively affluent and is home to Northwestern University. Most residents own their own homes, so the economic status of the town is sufficient to supply those who need to take advantage of the funding. The proposal also stipulates that the applicant must be an African American or descendant of an African American who lived in the city between 1919 and 1969, right when the Great Migration was occurring. With limited scope and a small overall population, the fund has sustainable aim and resources.

The question then becomes whether or not the same practice is sustainable on a larger scale. When one considers Austin Boulevard, located in Chicago’s famed “West Side,” he or she cannot avoid the glaring economic utopia located just blocks away in Oakbrook Terrace. If even the same allotment of $25,000 were given to African Americans and other affected minority groups in Austin, a great deal of suffering could be alleviated. Wealth could be built. That investment could come back to serve the community at large. To provide funding on that scale would require higher taxes, which makes the issue a municipal concern or even a state one.

The question which must be asked, then, is whether it is right to place higher taxes on Chicago communities in order to lift the 21% that lie below the poverty line out of the mire of a weak economy. Providing for the elements of basic human dignity would require us to say yes. There can be no denying the historical evidence that racial discrimination has played a key role in establishing the modern economic order. Until economic disparity is addressed, racial tensions cannot begin to heal. Majority and minority races cannot see each other as equals until they have equal opportunities to try their hand at equal things. Crime is higher in lower-income areas of Chicago because those areas are lower income. There is less effective education. There is a poorer economy, leading to poor-quality jobs. There is no wealth in families—either immediately or generationally. Where there is no wealth, there can be no progress. Where there is no progress, minority races cannot become equal. The experiment beginning in Evanston is a start, but I recommend that more financial aid be raised and provided for low-income communities. As minority communities are provided with more financial reparations, minority groups will become more equal financially and socially to majority communities and groups.

I end with a personal plea for all people, wherever they live, to be more aware of the plight of their neighbors. I have lived in Chicago for much of my life. I love the city. I love its culture, its people, and its very atmosphere, which is permeated with an indefinable, elusive air of home, of family, and of happiness. Yet, even so fond as I am of the city, I cannot in good conscience be ignorant of its flaws. I cannot ignore the impoverished, or pretend that I have not had more opportunity to enjoy the fruits of the city than those who live in its poorer neighborhoods. To them, one of the greatest cities in the nation is a trap not a source of pride. In order for us to truly share in the fruits of our homes, we must share those fruits with those who cannot taste them.

About the Author: Zachary Beyler is from Chicago, Illinois. He is a student at Brigham Young University-Idaho majoring in Educational Psychology with a content emphasis in history and government. He enjoys all outdoor activities except running, which he considers to be “exhausting” and “pointless.”