Chicago Poised to Create One of the Nation’s Largest ‘Guaranteed Basic Income’ Programs

The Chicago City Council is poised to vote this week on what would be one of the nation’s largest basic income programs, giving 5,000 low-income households $500 per month each using federal funding from the pandemic stimulus package enacted this year.

Mayor Lori Lightfoot (D) has proposed the more than $31 million program as part of her 2022 budget, which the city council is scheduled to consider on Wednesday. The one-year pilot program, funded by the nearly $2 billion Chicago received from the Biden administration’s American Rescue Plan, is supported by most of city’s 50 aldermen. But it has received pushback from the 20-member Black Caucus, which has urged Lightfoot to redirect the money to violence prevention programs.

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Basic income programs have been spreading across the country since Stockton, Calif., started providing monthly stipends with no strings attached to 125 of its residents in 2019. Those stipends resulted in more full-time employment and improved mental and emotional well-being among recipients, according to preliminary findings reported earlier this year by researchers who helped design the program.

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Since Stockton’s program launched, about 40 other cities have considered or started on similar efforts to target economic insecurity within their boundaries, according to Mayors for a Guaranteed Income, including Denver, Newark, Pittsburgh, San Francisco, New Orleans and Compton, Calif. A program in Los Angeles will provide 2,000 residents with a guaranteed income of $1,000 a month for a year.

The surge of interest in basic income has been fueled in part by the influx of money that cities have received from the coronavirus stimulus package and the formation of Mayors for a Guaranteed Income {snip}

Critics worry that guaranteed income programs will discourage people from finding jobs and drain the labor force, a particular concern amid the record job openings in the country this year, said Michael Faulkender, who served as an assistant treasury secretary for economic policy during the Trump administration. Last week, the National Federation of Independent Business reported that 51 percent of small business owners have jobs they cannot fill, more than double the historical average of 22 percent.

“There are still millions of low-skilled jobs out there, and you have small business owners who can’t find workers to join their companies,” said Faulkender, who teaches finance at the University of Maryland. Proposals like the one in Chicago feed the “process of reducing the willingness of people to participate in the workforce,” he said.

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The 5,000 recipients, who must be adults and make less than $35,000 a year, will be chosen randomly for the program. Chicago Alderman Gilbert Villegas said the city plans to track the recipients’ expenditures during the first six months and then provide more targeted assistance, such as help with paying heating bills or for food. The costs of supporting the program, he said, “is well worth the investment” when weighed against daily costs of poverty in Chicago, such as gun violence and incarceration.

The Chicago basic income proposal dates back two years when a small group of aldermen led by Villegas proposed a resolution that would have established a $50 million basic income program. {snip}

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Polling over many years has largely showed the American public does not support universal basic income. In April, the Pew Research Center survey found a third of Americans say it is “very important” for the United States to provide universal basic income while a fifth said it was “somewhat important.” Forty-five percent said they were against.

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