New study shows cost of segregation to Chicago region

It’s been well established that Chicago is one of the nation’s most segregated cities, a legacy of what has been a century of racially motivated behaviors that have disenfranchised and divided the city, lessening, and in some cases, thwarting economic development, as well as access to education, public resources and education.

“After the start of the Great Migration in 1916, the Chicago Real Estate Board (CREB) instituted racially restrictive covenants that prohibited African Americans from purchasing, leasing and occupying housing outside of a small area on the city’s South Side. These covenants were legal and allowed racially discriminatory housing policies to continue for decades,” notes a recent study by the Metropolitan Planning Council, that takes a wider look at the region, on the whole, a departure from most academic and policy studies that have focused on the city alone.

With the tile of The Cost of Segregation,” the MPC results were shared at the April meeting of the Chicago Fair Housing Alliance last Wednesday, to local service providers, and advocates. As Patricia Fron, executive director of CAFHA, notes, “our region's segregation did not happen organically, it is the direct result of public policy.”

The Council, together with Urban Institute and a team of regional policy advisors, analyzed segregation patterns in the 100 largest metropolitan areas in the country.  They were driven by two questions, “What does it cost all of in metropolitan Chicago to live so separately from each other by race and income? And, what can we do to change these patterns of segregation, so that everyone living in our region can appreciate in and create a stronger future?”

For many that are not affected by segregation, there is often a lack of concern, or even awareness of the costs to the city, as well as to the region, on the whole. Study authors sought to show the loss for the region, as well as for the individuals. They examined three types of segregation: economic, African American-white, and Latino-white. That led to a central question: “if the Chicago region reduced its levels of segregation to the median levels of segregation of the nation’s 100 biggest metros,” what would it look like?

Over generations, subsequent policies, and practices, have have created barriers between people of different races and incomes.In turn these have had a profound effect on key areas such as education, employment and residence; making one’s zip code a determinant. The resulting devastation, as MPC, has shown affects “entire city neighborhood and suburban villages, towns and cities,” they noted.

Earning our daily bread is a common factor for nearly all of us, and the researchers found “that economic segregation and income inequality compound and exacerbate each other’s effects.”  An examination of the data shows the unfortunate result: ”a self‐reinforcing cycle, in which income inequality creates segregation and segregation furthers income inequality. These lowered incomes have a cost: research has shown that if the average incomes of people of color were raised even beyond the national median, up to the average incomes of whites, our gross national product would increase by $1.9 trillion.”

Using economic standards,”incomes for African Americans in the Chicago region would rise by an average of $2,982 per person per year—or an overall increase of $4.4 billion in additional income in our region—if we reduced the levels of economic and African American-white segregation to the national median,” statistically speaking.

Looking ahead, if those numbers were to change, in keeping with white median figures, there would also have been an increase of more than $3,000 from African Americans, over $8 billion dollar in overall income, and a 30 percent decrease in homicides.

Solutions may, they claim, may not be simple, but one idea is a “local Earned Income Tax Credit to housing policies that avoid concentrating where the wealthy and the poor live, to more transit options to connect workers to jobs.”

There are perhaps few people in the country, much less Chicago residents, who are unaware of the increasing violence, mostly fatal, that has plagued the city and exceeded previous records, especially with homicides.  “In 2016, murders in Chicago totaled 764, a 58 percent increase from the previous year. This sudden spike in gun violence has garnered both national and international media attention, earning Chicago the reputation as the murder capital of the United States,” MPC cited in a February article.”

“Using the region’s 2010 homicide rate—the most recent figures available at the regional level—our study found that the Chicago area could have boosted its economy simply by being a safer place to live,” researchers summarized.

Examining the relation between safety and livability, and how can it be proved to save lives as well as increasing  the latter are topics for the “next phase of work, which will be  “focusing on four areas: police reform, the geographic concentration of crime and violence, criminal justice policy, and how place impacts the re-entry and recidivism of people with criminal records.”

Meanwhile here are some startling statistics: ”167 more people would have lived that year, [2010] earning some $170 million over the course of their lifetimes; The region would have saved some $65 million in policing costs and an estimated $218 million in corrections costs; and the region would have saved some $65 million in policing costs and an estimated $218 million in corrections costs.”

In 2010, the number of African American homicides was over 17 times the number for whites; and, as the media reports of the intersection of violence with race and segregation, and poverty, gives the study results an even stronger understanding of the relationship between factors.

Another widely held misbelief is that, for far too long, is “many have had the misperception that Chicago’s violence did not impact them. In fact, violence has a ripple effect: it removes residents from communities by death and incarceration, unravels families and traumatizes survivors. Each of these factors saps the capacity of students and workers and makes the city and region a less appealing place to live and work. Of the 10 U.S. cities with highest murder rates, Chicago ranks eighth. Most of these cities have high levels of economic and racial segregation as well.”

Frequently overlooked, in the equation, are Latinos who are frequently underrepresented in discussions of segregation, and overlooks some important deficiencies. For example, while 25 percent of this population are available for Chicago Housing Authority units, they occupy only 9 percent of available units.

Going even beyond that measure, Latino household mobility is often the result of displacement caused by real estate speculation rather than the family’s upward economic mobility. Many of them are “displaced by urbanization, and gentrification, in their neighborhoods,” which can be seen in the city’s Pilsen and Logan Square neighborhoods, and is sharply increasing, recently, in the Albany Park neighborhood.

Housing, specifically affordable housing, is becoming a scarcity in Chicago, and even regionwide there is a challenge for middle and lower middle class residents. But, mention the word, affordable housing, and opposition grows, with scaremongers raising the spectre of crime, and decreased housing value.  The “not in my backyard” syndrome known by the acronym NIMBY has become part of social service vocabulary.

Andrew Geer, Vice President and Chicago market leader for Enterprise Community Partners, showed the attendees slides of some of the more negative comments gleaned from social media -- nearly all negative, many racist, and largely uninformed.

He also gave several points for those providers and advocates attending, some of which were explaining how the system shapes the discussion, connect housing to community issues, and show how affordable housing is a vaccine to prevent social ills, such as homelessness. But, most of all show what will be lost to communities, if there no affordable housing.

Finally, education, the bellwether of middle class attainment, has been compromised by segregation. Researchers “found a correlation between lower levels of segregation and a higher percentage of the population holding a bachelor’s degree, for both African Americans and for whites, this means the Chicago region is losing out on some $90 billion in total lifetime earnings as a result of our education gap.”

Simply put, “Latinos have the lowest bachelor’s degree attainment at 12% with African Americans at 20%,” and while “the U.S. President’s Council on Jobs and Economic Competitiveness found that by 2020 there will be 1.5 million too few college graduates nationwide to meet employers’ demand,” it’s not hard to conceive how much of a stronger workforce the region could have had.

Without direct and consistent efforts, another decade may pass, with yet another study, released, again deploring the deleterious effects of racial and economic segregation in the Chicago region.

As the current study has shown, change requires effort. And, as Fron noted, “since segregation impacts all residents, limiting individual opportunities, and diminishing our region's economic prosperity, it will therefore take effort to change.”

Lack of Illinois budget stays, governor faces challengers

The story remains the same: No budget for the state of Illinois. A recalcitrant Republican governor and an equally stoic Democratic legislature have not been able to work together, at all.  In the almost two years since billionaire Bruce Rauner was elected, or some say bought the governorship, to the nation's fifth largest state, it is awash in red ink, and unpaid bills. Total debt is $267 billion, or put another way, $56,000 per Illinois household.
 
Rauner has Insisted that his “turn around agenda” be implemented before any budgets can be approved, including union busting, tort reform, deregulation and weakened workmen’s compensation, to name a few, and in this blue state, the standoff has remained. So much so, that there is $12.5 billion dollars in unpaid bills, and the state has the worst credit rating in the United States. And, in February, FItch gave a rating to the state, at just above junk bond status.
 
On the horizon, despite hand wringing, and partisan anguish, Illinois is now subject to speculation, and hope; recently pinned on revenue gain with the legalization of marijuana; a bipartisan “grand bargain”; and a bill to force the gubernatorial hand at a balanced budget. Observers say that the chance for pot and the new bill, are slim, and  even in a best case scenario, might provide no relief, which was so desperately needed, yesterday.
 
Illinois Policy, an independent policy organization, focused on the effort of HB 3868 which was introduced by State Rep. Jim Durkin, (R-Western Springs) which “would allow Gov. Bruce Rauner to reprioritize and cut spending to balance the state’s budget, as the Illinois Constitution requires. If the General Assembly sends the governor an unbalanced budget for fiscal year 2018, this bill would enable the governor to refocus the state’s spending on those most in need and to align the cost of government with what taxpayers can afford,’ they summarized. In short, the bill, which has been sent back to committee, would continue to pay for government services, transfer unspent monies to the general fund, amongst others.
 
While noting that putting that much power in the hands of a governorship known for corruption, Illinois Policy stresses that  there would be safeguards. They emphasize, “it has safeguards to prevent abuse of the expanded budget-cutting authority. First, the governor would not be arrogating more power to himself, but rather exercising limited budget-balancing authority at the direction of the General Assembly. Moreover, this expanded power is intended to bring the state in line with the explicit requirements of the Illinois Constitution and to rein in government, not expand government at the expense of private citizens.”
 
Last week, we had the following: “in a report issued Thursday, Moody's Investors Service contends the state's financial pressures are the result of a "lack of political will" between Republican Gov. Bruce Rauner and Democrats who control the General Assembly rather "than a recession or other factors beyond the government's control, “ reported The Chicago Tribune.
 
As the end of the legislative season approaches, on 31 May, it seems that the state will fall off the proverbial cliff, financially speaking. "State leaders are at a critical juncture, facing a choice between further credit deterioration without a compromise or potential credit stabilization with a budget agreement," the agency said
 
If the situation continues, what they called “political paralysis” will begin for a third year, then the financial picture will further increase to over $28 billion dollar in unpaid bills.

Gov. Rauner

In the midst of all of this are the often bewildering statements from the governor, witness the latest comment. "This is, you know, some people call it sausage being made or whatever. It is a difficult process, and there is give and take," hardly words to inspire confidence in his leadership. Even those that are motivated by charisma in politics, Rauner comes up short. Some critics are looking back longingly at the Quinn administration, a politician noticeably deficient in this regard, according to contemporary standards.
 
The Tribune also reported that, “While state government has been able to stagger along without a budget, Moody's says a third year without a budget agreement will "signal political paralysis" and could lead to a credit downgrade as Illinois may be forced to put off debt payments and cut pension contributions in order to fund day-to-day needs.”

"By not fully paying its bills, Illinois is facing a growing risk of long-term damage to the state's public higher education system and its network of human service providers," the agency said. "While this pressure might fuel urgency for legislators and the governor to reach a fiscal compromise, there are signs already that protracted payment delays are causing perceived harm to these public programs."
 
With the country just easing itself from the Great Recession, there are many that are vulnerable and service organizations in the state  need continued, and consistent help, from job training programs to mental health and addictions treatment; all are begging and many have had to restrict, or eliminate programs, or depend on volunteers, to provide service.
 
Perhaps nowhere is this seen more than in education, where junior colleges and regional four-year institutions, are suffering and being forced to take furlough days, and cut programs to stay afloat. As Moody’s noted, “long term changes to the state's public higher education system and its network of human service providers,” are greatly affected.
 

Less than two weeks ago college and university presidents went to Springfield to vent their frustrations and share the consequences of the absence of a state budget. “We no longer have any tissue, any additional cuts that we can cut," Chicago State University interim President Cecil B. Lucy said. "We are basically down to the bone. We have nothing more to give."
 
For the regional schools, the people most often hurt are low income minority students of color, often, the first, in their families to go to college and earn a degree.  As the Tribune noted, “particularly at the state's smaller regional universities that have long served as affordable.”
 
Last year, these schools “received only infrequent and unpredictable funding,” and the future looks grim, as “universities across the state, hundreds of employees have been laid off, dozens of academic and athletic programs cut, weeks worth of pay erased through furloughs, maintenance projects halted, vendor payments delayed and reserves emptied,” said the paper.
 
Statistically, “About 25 percent of students enrolled in Illinois universities attended public institutions in 2015, according to the Illinois Board of Higher Education. Of that, about 48 percent chose one of the regional institutions,” an important fact, as many of these schools serve as a conduit to the middle class, and a boon to the social capital of the state.
 
Stepping into the morass of Illinois finance and politics are contenders for the next gubernatorial race in 2018 is another wealthy businessman, J.B. Pritzker, heir to the Hyatt Hotel fortune, and wealthy investor and entrepreneur. While the Pritzkers have been associated with liberal causes for sometime - $200,000 to Democratic causes, and serving as a national co-chairman for Hillary Clinton in 2008, in her unsuccessful bid against Barack Obama -  this entry might prove to be the road less traveled - great wealth.
 

Notably, Rauner spent $27.6 million of his own money, plus the $65.3 million, from other sources, thus earning him the right, some consider to buy the governor’s office. While that, in and of itself, might be questioned, there is no doubt that money plays a vital role in this state.
 
To be fair, Pritzker did identify several key issues that have frustrated residents in his assessment. As he said, “I've traveled across Illinois, I've listened to people express their deep concerns about the direction of our state. It is clear that having a governor who's unwilling to address our state's challenges is having a real impact on people's lives," Pritzker said in a statement, released last month.
 
He has also said, and as the Tribune noted, that “he would be willing to self-fund a campaign for governor.” And, in the stratosphere, of personal wealth, “Pritkzer is listed at No. 190 on Forbes' annual list of the 400 wealthiest Americans with an estimated net worth of $3.4 billion, and he is one of the few in Illinois who could self-fund a campaign and outspend Rauner,” who is the poor boy with only $188 million in 2015.
 
Also throwing his hat into the ring, is one iconic name in American politics - Kennedy - to be exact Chris Kennedy, the son of the late Robert F. Kennedy, and nephew of President John F. Kennedy, and cousin of Caroline Kennedy. He previously ran the Merchandise Mart and his name alone could garner votes. With a tradition of funding national political campaigns, it’s a sure bet that there is still money left over for a run at Illinois.
 
Capturing, and charming, listeners, at a fundraiser for the Special Olympics Chicago, he reminded them, at his acceptance speech that he was “an immigrant to Chicago,” and that despite his Boston roots, “I’m a convert, And there’s not faith as strong as a faith of a convert,” and that giving is far better than receiving.
 
In a hard hitting statement, Kennedy also said, "I think Gov. Rauner's taken a state government budget problem and turned it into economic chaos for the rest of the state. I don't think it needed to go that way. And I think it's fixable.”

Chris Kennedy

The Rauner-backed GOP also referred to Kennedy as a Madigan "lap dog." Kennedy, in turn, called the attacks "desperate" and "pathetic."  "I think it's an insult to me, an insult to the entire Kennedy family and an insult to the voters of Illinois to make a statement like that that anybody's going to believe," he told the Chicago Tribune.
 
In an even tougher vein, “Kennedy, however, contended it was intransigence Rauner has shown in seeking his economic agenda that has damaged the state in a historic stalemate that has left Illinois without a full-year budget for 19 months.”
 
With time ahead, Illinois can no longer afford to look down, versus up, for whoever wins next year, and while there are other contenders, this election, like the budget itself, may take money, as well as moxie.