The Constant Business Opportunity in Enlightened Self-Interest
Aerial view of CTA Wilson Station and the Gerber Building in Uptown, Chicago, looking south toward the downtown skyline.
As the economic and political climates change daily, one local fact remains constant: Chicago is one of the most racially and economically segregated regions of the country. Most discussions of segregation focus — rightly — on its toll on excluded communities. But economic and racial exclusion also levy hidden taxes on companies and their leaders. What are these taxes?
Ask any Chicago executive where they would buy a home, and the answer exposes one cost of geographic segregation: most of the region’s 77 community areas are off the table — not for lack of housing, but because decades of disinvestment have made them unattractive to families with options. As Chicago’s Metropolitan Planning Council (MPC) and the Urban Institute (UI) pointed out, high-income households pile into a narrow band of neighborhoods — Lincoln Park, the Gold Coast, the North Shore, for example — driving artificial scarcity and inflated prices.
Geographic exclusion guarantees a shallower talent pool than the region’s human capital warrants. In 2020, the Federal Reserve Bank of Chicago found that 700,000 jobs sat within a 30-minute transit commute of the Loop — but only 50,000 were reachable from the South Side. Geography bars workers before they ever apply.
Employer practices make the situation worse. Skills for Chicago documented barriers that push out qualified candidates before they reach an interview. These include:
• Algorithmic screening that filters for resume craft rather than job skill
• Degree requirements untethered to actual job needs
• Background checks that penalize dismissed cases and records that are unrelated to potential job performance or risk
• Hiring managers who discount applicants based on zip code or resume gaps.
As one executive put it in the MPC/UI study: “Our talent pool is much larger if we go beyond recruiting those with four-year degrees.”
For investors, geographic segregation shrinks the opportunity set. The Urban Institute found that capital has flows inequitably by race and income in Chicago for decades. The result: a handful of high-demand neighborhoods absorb most commercial real estate investment, while the rest of the city sits with undervalued assets, appraisal gaps, and thin developer interest. In a metro area as large as Chicago, the investable geography should be far wider than it is.
When large portions of a region’s population earn less, spend less, and can’t build wealth, the aggregate market shrinks. The Brookings Institution identified millions in unrealized revenue sitting in underinvested Chicago neighborhoods. Demand that exists but can’t be unlocked. Economic exclusion is suppressing the market companies sell into.
Operating costs compound the problem. Companies near high-violence, disinvested areas pay more for insurance, security, and recruitment —costs that hit owners and shareholders.
According to the Illinois Policy Institute, Illinois carries the nation’s highest effective property tax rate — 1.83% statewide, 1.98% in Cook County. The cause is partially structural: segregation demands more government services — more police, more emergency response, more public health infrastructure — than a more equitable region would.
Corporate leaders are often surprised to learn how many of their own employees live in the poorest communities in Chicago. Efforts to hire from and invest in the communities where their employees live do not just help others. They are helping their own workers come to work more productive because of these investments.
The case for equity is not just moral. It is fiscal and personal. Chicago’s economic and racial exclusion create a structural tax on companies and corporate leaders, paid in inflated home prices, constrained talent, compressed investment geographies, suppressed consumer demand, elevated operating costs, and high taxes. The status quo is expensive for everyone.
Six years ago, the Corporate Coalition of Chicago was established to bring together companies whose leaders understand that reducing economic and racial inequities is not just the right thing to do — it is good for business, business leaders and the workforce. Our members are rethinking hiring, procurement, and investment to expand talent pools, open markets, and reduce the costs that a fractured region imposes on everyone.
As the federal government pulls back support, local needs are growing and business leaders in Chicago are being called on to do more. Among the calls, investing in business practices that create more shared opportunity is not only the right thing, but also the smart thing. The cost of inaction is too high. And the benefits of acting in enlightened self-interest are too clear to ignore.
