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#Racial Wealth Gap

Author: Louie Jean (Data Lead)

#Racial Wealth Gap

Two-thirds of American middle-class wealth is in the form of homeownership (according to Edward Wolff / Survey of consumer finances, 2016 study). Among lower- and middle-income households, White families have four times as much wealth as Black families and three times as much as Hispanic families. This is a consequence of federal policies by the Home Owners Loan Corporation (HOLC) created in 1933 under FDR. Its application was later known as redlining, or as sociologist John McKnight described it -- the discriminatory practice of fencing off areas where banks would avoid investments based on community demographics. This discrimination in lending practices prevented African Americans and people of color from owning homes. Furthermore, their neighborhood -- being deemed unfit for investment -- was left underdeveloped and in disrepair. African Americans in those neighborhoods were frequently limited in their access to banking, healthcare, retail merchandise, and even groceries.

“Based on preliminary data, there is little evidence that COVID-19 impacted high school graduation,” said Doug Shapiro, Executive Director of the National Student Clearinghouse Research Center. “However, the pandemic impacted high school graduates in their immediate college enrollment, and those from [specific] high schools have been hit the hardest…” The preliminary High School Benchmarks report for the class of 2020 (NSCRC Special Analysis) showed that graduates of higher-income and low minority high schools demonstrated higher levels of college enrollment than their counterparts from low-income and high minority high schools.

High-minority schools were defined as schools where at least 40 percent of the students are Black or Hispanic and low-income schools were defined as schools where at least 50 percent of the students were eligible for a free or reduced-price lunch.

Overall, far fewer graduates went to college immediately after high school this fall, declining by 21.7 percent compared to 2019 graduates but the public college enrollment among graduates of low-income high schools declined at disproportionately higher rates, revealing impediments to college access during COVID-19.


It is very important to address that COVID-19 has a disproportionate infection rate, a disproportionate death rate, and a disproportionate loss of income rate on communities of color (a compound that affects women who already experience an income discrepancy with their male counterpart) in ways that will continue to persist throughout the economy.

Low-income high school seniors, whose circumstances have worsened during these difficult times, draw a very different cost-benefit analysis than families higher up the economic ladder when faced with the choice to go to college.

Considering Maslow's hierarchy of needs -- getting an entry-level job to secure food for survival far outweighs the long-term benefits of attaining a college degree. Staying alive is more important. This is a very real reality that students face and it is very easy in this gig economy for students to go another path. A question that can be looked at therefore is, what interventions help low-income students across the semesters to pursue a 4-year degree. Is it only monetary interventions?

Living in a neighborhood that lacks wealth means that Black and Brown inner-city students exist in a school system that also lacks wealth. #DegreesNYC Youth Fellows recommend that alternatives to zoning and minimum funding for schools be explored. White suburban schools have access to libraries, fully equipped athletic facilities, state fields to play in theater departments with seasonal plays and concerts, digital and visual performing arts. Affluent neighborhoods have air conditioning, fully resourced biology and chemistry labs, and school buses that make transportation safe. Author Gloria Ladson-Billings asks that we call the resulting achievement gaps by a more appropriate name for all of the foregone schooling resources that were never invested in the education of the Black and Brown child over time. This is outlined in her presidential address From the Achievement Gap to the Education Debt.

Student tracker reports were looked at by the research alliance for the years 2008, 2012, and 2015. In each case, there was a significant difference between students that are college-ready in the Bronx vs the other boroughs.

“By and large, the question of whether money matters is essentially settled,” Northwestern economist Kirabo Jackson concluded in a multistate study. “Researchers should now focus on understanding what kinds of spending increases matter the most.” This is where we get into the nuance of targeted spending because there have been pricey initiatives in the past that have fallen short of expectation (i.e. NYC Renewal Turnaround Program). Instead of focusing on attendance, for example, researchers should consider the effects of increased spending for accessibility, inclusivity, and justice. These are arguably equally important levers in reaching a quality postsecondary credential.


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