The Racial Wealth Gap and People with Disabilities

“To this day, African-Americans make a lot less money than Whites,” actress Samira Wiley narrates in a recent episode of Netflix’s Explained. “They’re far more likely to be unemployed, and studies show employers still discriminate. But even if we managed to close those gaps right now, centuries of inequality have already compounded.” That compounding phenomenon is known as the racial wealth gap — and it has a complex impact on the over 400,000 people of color with disabilities who call the Chicago region home.

The Chicago Community Trust is taking on the racial wealth gap:

Racial and ethnic wealth inequality is at the core of most of the Chicago region’s thorniest challenges…We will not be able to realize our vision of a thriving, equitable and connected region until we tackle this systemic issue. [https://www.cct.org/about/closing-the-racial-wealth-gap/]

Often missing from this discussion, though, is the intersection of disability and the racial wealth gap. People of color with disabilities are among the most marginalized in America and Chicago, and taking disability into account will strengthen strategies focused on this intractable issue.

What is the racial wealth gap?

Simply put, the racial wealth gap describes the difference in median wealth between White households and households of color. Wealth doesn’t just mean “dollars earned”; it includes assets (property, savings, retirement accounts, stocks, etc.) plus income (earnings received) minus debts (student loans, medical bills, credit card debt, mortgages, etc.). As scholar activist Dr. Angel Love Miles explains, “Wealth is a clearer measure of economic standing than income alone” precisely because it provides a more complete financial picture. For people of color, the racial wealth gap continues to dominate that picture. The Federal Reserve recently reported that White households average eight times the wealth of Black households and five times the wealth of Latinx households nationally.

The racial wealth gap is more than a statistic; it impacts the lives of people of color from day to day and generation to generation. “A lot of times with White communities, there’s this idea of generational wealth,” says Dr. Kate Caldwell of the University of Illinois at Chicago. “And when we talk about social mobility, the idea that your children will be better off than you were, well, that’s a lot easier for a White family to do than for a Black family in the United States” because of the racial wealth gap and, crucially, the policies that created it. Far from an inevitable state of affairs, the racial wealth gap results from systems — past and present — intentionally designed to work against people of color. (Explained delves into how many of these systems came to be and still function today.)

Miles points out even with the impact of civil rights legislation like the Fair Housing Act of 1968, “White Americans continue to benefit from the economic head start that past and present discrimination has afforded them. As a consequence, White Americans today hold the majority of the nation’s wealth.” And that disparity leads to diminished financial security and opportunities for people of color — especially those with disabilities.

How does the racial wealth gap intersect with disability?

People with disabilities face significant barriers to wealth building and are 28 percent more likely than nondisabled people to be under-banked or unbanked. Limited accessible housing options can reduce disabled people’s chances at homeownership. And the asset limits baked into many disability benefits programs make accumulating wealth all but impossible. For disabled people of color, systemic racism multiplies these disadvantages; the Chicago Community Trust Disabilities Fund has found that around 70% of accessible housing stock in Chicago is located in majority-White neighborhoods with higher-than-average rent and property values. “Black Americans are less likely to own a home than any other racial group in America,” Miles says. “This has massive implications for the control Black Americans have over where they live, the quality of schools in their neighborhoods, the accessibility of their homes and communities, and their overall social and political power.”

“This isn’t only about wealth accumulation; this is also about financial security,” explains Lindsay Baran, Policy Analyst at the National Council on Independent Living. “It’s about being able to meet basic needs.” But for many disabled people, meeting those basic needs requires remaining in poverty — thanks to something called the disability benefits trap.

“The benefits trap is a very particular flavor of trap, because it’s 100% systemically created and maintained,” says Caldwell. “The social safety net for people with disabilities requires that someone be unable to work in order to receive those benefits. However, since we [now] have expanding work requirements to receive benefits, it actually requires you to work to receive benefits that you have to be unable to work to receive. So it creates this catch-22.” And when programs like Supplemental Security Income (SSI) maintain the same strict asset limits for decades — currently $2,000 for individuals and $3,000 for couples, unchanged from 40 years ago — it becomes almost impossible for recipients to remain financially stable, let alone build wealth for the long term.

Racism also affects how disability services play out in practice for people of color. Miles, whose research focuses on Black women with disabilities, explains how “research suggests because most disability service providers are White, they are less likely to be culturally competent about how the history of racial inequality in America has impacted how Black people tend to interpret and experience disability, and often have unconscious biases about what their needs and capabilities are. This reality impacts Black people with disabilities’ awareness of the disability resources available to them and the quality of the services they receive.”

A similar phenomenon comes up often in Caldwell’s work with the Chicagoland Entrepreneurship Education for People with Disabilities (CEED) Project, which promotes entrepreneurship as a pathway to employment for people with disabilities. “We worked with primarily biracial women of color, and a lot of people with intellectual and developmental disabilities. Part of the reason why is because when they went to VR [vocational rehabilitation], they were being turned away. When they went to small business development centers, they were also being turned away — even when they went to women development centers or minority-owned business development centers. Most of the entrepreneurs with disabilities we have worked with are operating outside both the disability service system and the business service system. Theoretically, they should be able to benefit from both, but they weren’t.”

Taken together, these barriers help explain how and why the racial wealth gap is amplified for disabled people of color. “Certainly a huge part of it is that racism and ableism are built into the policies and structures of our society,” Baran says. “Disabled BIPOC [Black, Indigenous, and People of Color] are facing compounded barriers in a system that’s not set up for them to succeed. ‘Pull yourself up by your bootstraps’ is a fantasy for most people, especially if you’re BIPOC, disabled, or both.”

What about COVID-19?

As COVID-19 disproportionately impacts Black, Latinx, and Native communities across the U.S, the racial wealth gap is widening in kind. In a recent NPR poll, 60% of Black respondents, 72% of Latinx respondents, and 55% of Native American respondents reported facing serious financial problems during the pandemic, compared with 36% of Whites. 41% of Black households, 46% of Latinx households, and 41% of Native American households reported having used up most of all of their savings, compared to just 25% of White households. As discussed above, people with disabilities often have very little savings to begin with — meaning that this financial squeeze hits disabled people of color even harder.

“Many people with disabilities are at greater risk of contracting COVID and having serious complications from it because of our underlying health conditions,” Access Living CEO Karen Tamley said in a video message on the disability community and the pandemic. In fact, COVID-19 represents a collision point between many types of oppression that disabled people of color face in particular. “Compared to White Americans, Black Americans have higher rates of poverty, lower rates of educational attainment, and are more likely to be employed in jobs that put their health and bodies at greatest risk,” Miles points out. “Simultaneously, Black Americans have less access to medical insurance and other resources to help mitigate the effects of this disadvantage. These factors contribute to producing disproportionately higher rates of disability in the Black community… They are also the very same factors that place Black Americans at greater risk for contracting the coronavirus.”

The benefits trap also poses an even greater threat to people with disabilities in light of COVID-19. Azza Altiraifi at the Center for American Progress explains that “as the COVID-19 pandemic spreads, SSI recipients will not have any meaningful savings to draw on, leaving them especially vulnerable to homelessness and food insecurity” — and throwing the intersecting oppressions experienced by disabled people of color into even harsher relief.

Confronting and closing the racial wealth gap for disabled people of color will require substantive change on the systemic level. Learn more about what can be done now, what successful policy shifts will look like, and how the Chicago Community Trust is addressing these issues in Part 2 of this series.

Learn more about Disability in the Chicago Region through our Inform and Act fact sheet series.

Follow the #AccelerateDisabilityInclusion campaign on Instagram @accelerate_ada, Twitter, and through the Disabilities Fund of the Chicago Community Trust on LinkedIn.