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The Bay State Banner: Report: Racial wealth gap, discrimination block minority businesses from financing

The Bay State Banner, May 26, 2021, Report: Racial wealth gap, discrimination block minority businesses from financing

“The racial wealth gap plays a critical role in determining which firms get started and which ones succeed,” noted Trevor Matos, research manager at the Indicators Project, the Boston Foundation’s research arm.

Matos said that the wealth gap stems from decades of discriminatory housing policies and lending policies that prevented many Blacks from buying homes.

Matos noted that the National Community Reinvestment Coalition has for years conducted tests where it sends pairs of individuals with identical profiles — one white, one a person of color — to lending institutions. The disparate results have suggested discrimination exists across the board.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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