Information Inequality: How Race and Financial Access Reflect the Information Needs of Lower-Income Individuals

• Published date: 01 May 2023
• DOI: http://doi.org/10.1177/00027162231219551
• Author: Patricia D. Posey
• Date: 01 May 2023
• Subject Matter: Part II: Supply

ANNALS, AAPSS, 707, May 2023 125

DOI: 10.1177/00027162231219551

Information

Inequality: How

Race and

Financial

Access Reflect

the Information

Needs of

Lower-Income

Individuals

By

PATRICIA D. POSEY

1219551ANN THE ANNALS OF THE AMERICAN ACADEMYINFORMATION INEQUALITY

research-article2023

The media landscape is more expansive than ever and

offers increasingly fast and cheap ways to consume

information. However, many racially and economically

marginalized communities live in information environ-

ments that fail to provide in-depth coverage of critical

topics, such as day-to-day finance. I offer an overview

of financial access and news deficits to argue that finan-

cial institutions and news providers have historically

underserved racially and economically marginalized

communities, contributing to information gaps in

financial news and the need for alternate sources of

information. I investigate how the placement of brick-

and-mortar fringe economy financial providers, such

as payday lenders, affects how people learn about and

make sense of their financial options. I show that these

sorts of concrete neighborhood characteristics influ-

ence how people participate in today’s economy and

share information. Because economic participation is

an essential element of citizenship, I propose that these

kinds of disparities in neighborhood characteristics and

financial access should influence the ways in which we

conceive of and deliver information to marginalized

groups.

Keywords: information inequality; race; income;

financial access

Racial and economic inequality readily

translates into information disparity. Extant

research on lower-income communities and

racial minorities has focused on the continuing

decline in local journalism in struggling com-

munities that has created news deserts—places

with limited access to the credible and compre-

hensive information that feeds democracy at

the grassroots level (Abernathy 2018). Lower-

income communities experience content gaps,

lower quantities of data, and lower-quality news

Correspondence: pdposey@uchicago.edu

Patricia D. Posey is an assistant professor in political

science at the University of Chicago. Her work broadly

focuses on American political economy and race.

NOTE: The author thanks the participants in the SSRC

workshop for valuable feedback on earlier drafts.

126 THE ANNALS OF THE AMERICAN ACADEMY

content created for their benefit (Hamilton and Morgan 2018). Racial minorities

who have disproportionately lower incomes experience additional news deficits

created by mainstream media that do not adequately cover Black and other

minority communities (Guskin, Moore, and Mitchell 2011). Further, there is less

in-depth coverage of critical topics such as education, local government, and

health (Waldman 2011) and an overrepresentation of negative news on Black life

(Pease 1989). This distorted information supply—only 1,000 ethnic media outlets

in the country provide news to underserved communities (Abernathy 2020)—has

increased the demand for content that is relevant to the lived experiences of

residents, and it also highlights the need to better understand what kind of con-

tent is missing. Researchers and analysts have long identified content gaps and

news deserts as barriers to lower-income individuals’ and racial minorities’ access

to high-quality information, yet scholarship has paid less attention to the differ-

ences in neighborhood characteristics that can reflect specific information needs.

One such neighborhood characteristic is residents’ access to financial institu-

tions and, therefore, to critical information about day-to-day finance. Although

there are many dimensions of how neighborhoods differ by race and income,

existing scholarship on media has previously focused on aspects of finance. Some

scholars have focused on how financial news information infrastructure often

provides content for those interested in investing and personal finance (e.g.,

Arrese and Medina 2002), while other scholars have drawn comparisons between

being unnewsed and being unbanked to underscore media audience problems

(Benton 2017). This article builds upon those inquiries to further investigate

what we can learn about information inequality by focusing on the availability of

news sources and financial services in the context of the decline in local journal-

ism in struggling communities.

As Americans’ trust in media has declined over the years, their confidence in

mainstream banks has likewise plummeted, decreasing by half (Benton 2017).

Where the alternative to traditional media may include social media with its par-

tisan clickbait, Facebook fake news, and hashtags, the alternative to mainstream

banking is high-cost financial services. Over time, income-poor, credit-poor, and

racial minority communities have seen the arrival of more and more high-cost

financial services, such as payday-lending storefronts, pawnshops, and check-

cashing outlets (CCOs). These services collectively comprise the fringe economy,

also referred to as alternative financial services. Because the products from this

suite of businesses are often more expensive than traditional or mainstream

banks through higher interest rates, fees, or prices for goods or services (Caskey

1994; Karger 2005) and their growth in minority neighborhoods (Faber 2019),

scholars are increasingly exploring the role of race and income in shaping finan-

cial access. I argue that financial institutions and news providers have historically

underserved racially and economically marginalized communities, contributing

to information gaps in financial news and the need for alternate sources of

information.

I offer an overview of financial access and news deficits to examine a previ-

ously underexplored aspect of information inequality. While scholars have stud-

ied financial access extensively, it is rarely in conversation with questions of news