Could This Program Help Pave the Way for Universal Basic Income in the U.S.?

A new program in Chicago will distribute $500 per month to 5,000 of the city’s residents for the next year. The Resilient Communities Pilot is the largest of a number of guaranteed income initiatives that are being tested in cities across the U.S. The goal: Relieve extreme poverty.

The pilots’ success could help ignite grassroots calls for a universal basic income (UBI). Of course, any failures or complications would likely be used as fodder for conservative ire. Still, politicians of all ilk would be wise to consider cash payments. And not just as a remedy for current poverty, but also within the framework of the inevitable robot revolution and the resulting transition to a world of work that looks drastically different from what it does today.

The rising popularity of guaranteed income

The Resilient Communities Pilot isn’t the only one of its kind in the Chicago area — the county began dispersing $500 checks to 3,250 different suburban households last month. Cook County’s program will last for two years.

In fact, guaranteed income has become a hot topic in local politics thanks to the COVID-19 pandemic, with the number of city-run pilot programs in the U.S. increasing from just 11 in 2021 to 82 in 2022. The city of Los Angeles is running its own guaranteed income program, with 3,200 participants receiving $1,000 each month for 12 months. Quite a few Californian cities have implemented cash programs worth $500 a month, including San Diego, Stockton and Oakland.

The state of Colorado has made its version of a guaranteed income program permanent — with two payments of $1,000 available to workers who lose their jobs, regardless of their immigration status.

Universal basic income in the unlikeliest of places

Unbeknownst to most Americans, there is one state in the union with a universal basic income — and it’s a red one. Ironic as it might seem, the state of Alaska has been supplying its residents with annual no-strings lump sums for four decades. The Alaska Permanent Fund pays residents out of the state’s oil revenue, so the amount varies from year to year. 

Conservative arguments against a universal basic income generally rest on the idea that any kind of cash grant encourages people not to work. Yet the Alaskan example demonstrates otherwise, with the state’s overall labor force participation unaffected by the payments, according to research from the University of Chicago and the University of Pennsylvania. 

Instead, the Alaska Permanent Fund has shown how any subsidy given to the people is also ultimately a subsidy for businesses, as recipients inevitably put that money right back into the local community.

It’s about outcomes

The notion that monthly payments amounting to less than what many CEOs make per hour could encourage people to quit their jobs and live the high life on government cash is simply ridiculous. Instead, worldwide trials in universal basic income have consistently shown positive outcomes for school attendance as well as better health, without any negative effect on adult employment. It did, however, free children from the premature burden of working to support their families.

“The reasons interest in these programs is on the rise may come down to three things: inequality, automation and issues with existing safety net programs,” Carmelo Barbaro, executive director of the Inclusive Economy Lab at the University of Chicago, told the school’s newspaper. Barbaro will evaluate Chicago’s Resilient Communities Pilot in order to determine its impact on participants and suggest improvements.

As inequality increases along with prices and inflation, there is a rising sentiment that “some other approach beyond just asking people to work is necessary to have a more inclusive society, where people can really lead lives of meaning and fully participate," Barbaro told the paper. "There’s also just the recognition that a lot of people who work are struggling to make ends meet.”

Preparing for the future of work

“The idea also has received additional cachet recently through the belief that the pace of automation is going to increase in the coming years and that a lot of economic dislocation will occur until people retrain or find other forms of work,” Barbaro explained. “Some believe that additional support in the form of unrestricted cash could ease the transition.”

Advances in artificial intelligence have made it clear that the nature of work as we know it is about to go through a dramatic change. No one can say for sure how that change will alter the total number of jobs available or whether all workers will be able to transition. If scaled to its potential, universal basic income could act as a stopgap and prevent a lot of unnecessary suffering.

Image credit: Christopher Alvarenga and Muzammil Soorma via Unsplash