Financial Capability and Asset Building With a Racial- and Gender-Equity Lens: Advances From the Field

This essay explores the enormous potential of social service organizations to contribute to people’s financial well-being. It is informed by the work of four pioneering organizations that use a racial- and gender-equity lens to advance financial well-being. It explores five strategies: (a) embedding financial development into social services; (b) focusing on youth transitioning to adulthood; (c) partnering with asset coalitions to expand financial opportunities; (d) partnering with financial institutions; and (e) developing fintech with equity. These approaches hold promise to help address the racial wealth gap and improve financial security.

From Community Coalitions to City Hall: Shaping Policy in Chicago With Mayor Harold Washington

Today’s cities are seeking more social equity—a response in part to police violence, pandemic disparities, and the racial wealth gap. Activists, planners, and local government reformers are looking for bold examples of equity planning—single initiatives and multi-faceted equity plans. The mayoral administration of Harold Washington in Chicago (1983–1987) shows how a grassroots electoral campaign combined with participatory policy development produced the Chicago Works Together (CWT) Development Plan—that promoted jobs, neighborhoods, and citizen participation. This article recounts the development of CWT and examines the impacts of CWT for Chicago and equity planning.

A Pathway to Racial Equity: Student Debt Cancellation Policy Designs

Student debt in the United States has had a disproportionate negative impact on black and Latinx borrowers. We argue that analyses of plans proposing student debt cancellation should therefore foreground their potential impact on racial equity. To do so, we use data from the 2019 Survey of Consumer Finances and model the impact of debt cancellation on four key policy outcomes (reach, impact on the most vulnerable borrowers, borrower wealth gains, and impact on racial wealth gaps). We examine universal policy designs as well as designs that incorporate an income eligibility threshold as a means of targeting benefits toward less affluent borrowers. We find that cancellation amounts ranging from $50,000 to $75,000 yield the most desirable outcomes, especially when paired with a relatively low household income eligibility cutoff at between $100,000 and $150,000. Such policies would cancel roughly half of all outstanding student debt without substantially expanding the racial wealth gap, while still reaching a large majority of borrowers and leading to substantial wealth gains, especially for black households.

The Racial Wealth Gap and Access to Opportunity Neighborhoods

Some Black households live in neighborhoods with lower incomes, as well as higher unemployment rates and lower educational attainment, than their own incomes might suggest, and this may impede their economic mobility. We investigate reasons for the neighborhood sorting patterns we observe and find that differences in financial factors such as income, wealth, or housing costs between Black and white households do not explain racial distributions across neighborhoods. Our findings suggest other factors are at work, including discrimination in the housing market, ongoing racial hostility, or preferences by Black households for the strength of social networks or other neighborhood amenities that some lower-socioeconomic locations provide.

Employee Ownership: Structuring Opportunities for Racial Wealth Building and Family Well-Being

Policies and practices of the 19th and 20th centuries have had a lasting impact into this century. This is most evident when examining racialized wealth inequality between Black and White families. This study of low-income employee owners examines the following questions: (1) Does employee ownership reduce the racial wealth gap? (2) How does employee ownership reduce the racial wealth gap, and (3) To what effect does employee ownership reduce the racial wealth gap? Findings indicate employee ownership impacts wealth building, advancement opportunities, and family economic security among Black employees and other marginalized populations. Policy and practice implications to advance employee ownership to address racial wealth inequality are highlighted.

Intergenerational Economic Mobility and the Racial Wealth Gap

A growing body of research documents the importance of wealth and the racial wealth gap in perpetuating inequality across generations. We examine the impact of wealth on child income. Our two-stage least squares regressions reveal that grandparental wealth has an important effect on the younger generation's stock, which in turn affects the younger generation's household income. We further explore the relationship between income and wealth by decomposing the child's income by race. We find that the intergroup disparity in income is mainly attributable to differences in family background. These findings indicate that wealth is an important source of income inequality.