Newswise — To help the public better understand why the middle class experience in Chicago differs across racial groups, the University of Illinois Chicago’s Institute for Research on Race and Public Policy, or IRRPP, has published a new report from its investigation among local residents.

There are two key reasons why a focus on wealth is important, according to the authors of “Chicago’s Racial Wealth Gap: Legacies of the Past, Challenges in the Present, Uncertain Futures.” The report, which is the fifth installment in IRRPP’s State of Racial Justice in Chicago series, also includes related presentations and infographics.

“First, wealth explains why families who seem similar in many ways (comparable income, parallel levels of education) can have very different experiences of well-being. Second, it captures how the long legacy of structural racism in this country continues to shape people’s life trajectories,” the report states.

From March 2019 to September 2019, the research team interviewed 99 respondents with children living in Cook County (39 whites, 30 Blacks, and 30 Latinos). The median respondent age was 42, the median household income among the sample was $100,000-$125,000, almost all respondents had four-year college degrees (two-thirds had graduate degrees), and the majority were homeowners.

Through one-on-one, in-depth interviews, the investigators found that intergenerational transfers of resources are the main driver of the racial wealth gap in the middle class. On average, white respondents come from families with far more resources and benefit from the support of those resources throughout the life course. These resource transfers go beyond inheritances to include a wide range of financial support and cash transfers in their everyday lives, such as help with paying for college, buying a home, buying a car, paying for child care or going on vacation.

Exacerbating this pattern, white families both receive far more support from family members and are also less often called upon to provide support to their extended family than their Black and Latino peers. As a result, white families generally have far more assets and far less debt than Black and Latino families, even when they have similar levels of education and income.

Another factor driving the wealth gap among respondents is the greater need for Blacks and Latinos, most of whom are first-generation college students, to take on student loans to pay for higher education. Starting their adult lives burdened with debt inhibits wealth-building.

“Our in-depth interviews highlight the precarity of many Black and Latinx families who have ‘made it’…Their precarity is set into stark relief when contrasted with the experience of many white families,” the report states.

The report also explores how the uneven financial stability between respondents impacts how they make choices for their children and how they think about their own financial futures.

“They were worried most of the time not just about themselves and their own financial futures, but in particular about their children and whether or not they would be able to maintain or improve their social standing in the years to come,” researchers said.

The report demonstrates how a lack of intergenerational wealth in middle-class Black and Latino families to weather financial bumps in their lives not only has important material consequences, but also creates levels of stress and anxiety that are affecting the mental health and wellbeing of these families.

Various sets of policy goals, such as renewed investment in public financing of higher education; stemming persistent discrimination in all aspects of the housing market; raising the minimum wage; enacting family-friendly work policies, and guaranteed federal health care coverage, are cited as examples that would help support middle-class families overall and help narrow racial gaps in wealth more specifically.

“The Black and Latinx families we spoke to are not merely managing the ongoing legacies of racism of the past, nor merely having to weather the persistent discrimination of the present, but are also feeling the full brunt of more recent policy shifts which function as a retreat from a commitment to the public good,” the report states.

Principal investigator and co-author of the report is Amanda Lewis, director of the Institute for Research on Race and Public Policy, professor of Black studies and sociology, and distinguished professor of liberal arts and sciences. Report co-authors include Iván Arenas, associate director for community partnerships at the institute; Maximilian Cuddy, UIC doctoral student in sociology; and Fructoso M. Basaldua Jr., UIC graduate student in sociology.

In addition to IRRPP’s research, the report features expert commentaries and contributions from Lorena Garcia, UIC associate professor of Latin American and Latino studies and sociology; Louise Seamster, assistant professor of sociology and criminology at the University of Iowa; Damon Jones, associate professor at the University of Chicago’s Harris School of Public Policy; Darrick Hamilton, Henry Cohen Professor of Economics and Urban Policy at the New School; Ralph Martire, executive director of the Center for Tax and Budget Accountability and Arthur Rubloff Professor of Public Policy at Roosevelt University; Allison Flanagan, director of policy analysis at the Center for Tax and Budget Accountability; Joanna Trotter, senior director of community impact for The Chicago Community Trust; and Natalie Moore, race, class and communities reporter for WBEZ-FM.

Support for the research and report was provided by the American Sociological Association; Chicago Area Study funding from the UIC College of Liberal Arts and Sciences and the Department of Sociology; Chicago Community Trust; UIC Office of the Vice Chancellor for Research; and the UIC Institute for Policy and Civic Engagement.