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What You Need to Know About Boston's Wealth Gap

By Nicholas Conley, Jul. 30, 2020
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Boston is booming.

From population growth to an array of rapidly-expanding new companies, New England's top city is bigger than ever. Sadly, there's a terrible secret underlying all of Boston's prosperity: the racial wealth gap is wide, and it's growing wider.

Back in 2016, the Brookings Institution reported that Boston had the worst levels of income inequality of any city in America. A joint study by Duke, The New School, and the Federal Reserve of Boston titled "The Color of Wealth" found that while Caucasian households in the Boston area had a median net worth of about $247,500, all other groups were scraping by at shockingly low numbers. Caribbean Black households were estimated to have a median wealth of only $12,000, Puerto Rican households had about $3,000, and U.S.-born Black households were shown to have a median wealth of only $8.

But where do these disparities stem from?

What's Going on
The factors that play into income inequality in America are widespread and they go back for generations. As NPR explains, the institution of "redlining" in the 1930s—wherein the Federal Housing Administration refused to insure mortgages in Black American neighborhoods—had a traumatic impact. Boston Fair Housing reports that from the 1920s to the 1940s, it was still seen as a mainstream, acceptable policy to implement racially restrictive covenants on new property, prohibiting it from being sold or rented to non-White buyers. Even jumping ahead to the 1970s, the desegregation of Boston's public schools caused fierce battles to erupt, according to The Atlantic.
While societal norms have certainly progressed, and today's Boston is more diverse than it's ever been, new issues have grown out of the old ones. Threats of gentrification and skyrocketing rents are a problem to anyone who calls Beantown home, but particularly for low-income communities of color. According to Boston Magazine, a repeal of rent-control laws in 1995 led to the current rent crisis, and unfathomable rent increases today are strategically used to clear out lower-income neighborhoods in order to remake them with luxury condos, pricey restaurants, and other class-restrictive businesses that further deepen the wealth gap. As Boston Magazine points out, even the city's boardrooms, universities, and political institutions possess a stunning lack of diversity.

Essentially, the city is getting bigger, the rich are getting richer, the poor are getting poorer, and as a result, the racial wealth gap is only widening.

The Fallout 
What sort of impact does this have on Boston's Black and Latinx populations today? As marginalized populations are punished with rising rents, escalating childcare costs, and stagnating wages, they are pushed further and further outside of the city limits just to afford basic needs. As a result, inequalities in Boston's power structure persist.
Some of these problems are easy to spot. For example, Boston might have some of the most lauded schools in the nation, but according to the Boston Globe, the number of Black students they accept is barely more than the number they accepted three decades ago. While housing discrimination is officially off the books, a Globe survey found that landlords in the Greater Boston area ignored emails from almost half of prospective clients with "Black-sounding" names.

It's Time to Close the Gap
Repairing the damage in Boston, and building bridges so that a sustainable, diverse middle class can rise up, requires a multi-pronged approach. Creating a more equal future means recognizing the needs of people across the city instead of just catering to the wealthy. Boston has enough luxury condos. Affordable rent and higher, more equal wages are what the city truly needs. More investments are needed in minority-owned companies, entrepreneurs, and students.

Fixing the racial disparity in Boston won't happen overnight, or on its own. Addressing this issue requires real effort, unification, and funding in order to create more opportunities for marginalized populations to succeed. That's why in 2017, Eastern Bank introduced the Business Equity Initiative, which directly seeks out and accelerates the growth of Black and Latinx businesses in the Boston area, in order to combat wealth disparities. Other organizations working to close the wealth gap are the Boston Impact Initiative, which provides funding and support to low-income entrepreneurs of color, and the Boston Ujima Project, which aims to take on all of the disparity issues facing Boston today—from gentrification to lack of healthcare—through a unified approach to create a better future.

If everyone works together, Boston can close the wealth gap. Join, donate, and volunteer today.

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