By Karen Freeman-Wilson
Recently, the city of Evanston made national news when it created a $25 million program to pay “reparations” to Black people who’d been impacted by decades of racist housing policies. The story made such a splash in part because it shed light on a system that creates an inherently contentious, us-vs.-them mentality within our country.
The dynamic comes down to this: Some of those who have means believe we live in a zero-sum environment. They believe that, if resources are redistributed to the underserved, it will somehow bring down the more affluent. While the saying goes, “a rising tide will lift all boats,” there are still those that believe another rising boat will sink their own.
But it’s clear that not everyone enjoys the same opportunities. For example, while Black people make up 14 percent of the population, there are just 124,000 Black-owned firms in the United States — or only 2.2% percent of all employer businesses. Today, 75% of venture capital goes to just three states (California, Massachusetts, and New York), and almost 90% percent goes to white males. I’ve sat in plenty of meetings, and trust me — white males don’t have 90% of the good ideas.
Addressing this inequity and supporting diverse populations makes us all healthier — and wealthier. As the current president and CEO of the Chicago Urban League and former mayor of Gary, Indiana, I am shocked to learn that we would generate an additional $2.3 trillion in economic growth if we eliminated racial inequities in income. That’s a lot of money to leave on the table, and far more than it would cost to truly address systemic inequities.
While the magnitude of this issue can paralyze some with despair, I am inspired to see private and public leaders begin to address more serious issues of inequality. The Biden Administration is making equity a key focus of its stimulus and infrastructure bills. The city of Chicago recently discussed the topic of reparations. And Chicago’s own Ariel Investments and Cleveland Avenue Foundation have stepped up in a major way.
Recently, the company launched Ariel Alternatives with the goal of investing in minority-owned companies to “narrow the wealth gap in underrepresented communities By spending with firms owned and run by people of color, big business is able to simultaneously help foster and elevate our communities.”
Ariel Alternatives hopes the new minority-owned businesses will generate up to $10 billion in annual new diverse spending and create 100,000 jobs for underrepresented minority employees over the next 10 years. The new effort has recruited some heavy hitters, as JPMorgan Chase committed up to $200 million to be a co-investor in the first program, Project Black.
Also, the Cleveland Avenue Foundation recently launched CAST US, a $70 million fund that will bridge the capital and resource gap that impacts Black, LatinX, and women restaurant, food tech, and beverage entrepreneurs on the South and West sides of Chicago.
This is the type of work that will truly bring the type of change that affects — and helps — everyone.
In the end, we must all remember that policies designed to horde wealth among the affluent have the perverse effect of denying all people the benefits of truly inclusive growth. We all pay a price for racial inequity, and we all stand to benefit by eliminating it.
Karen Freeman-Wilson is the president and CEO of the Chicago Urban League, and a member of the Kauffman Foundation Mayors Council.