Who qualifies for the direct cash payments, and how successful are basic guaranteed income programs?
Chicago and Los Angeles have recently approved a basic universal income program. The program will provide monthly guaranteed income to qualifying residents for one year.
On October 27, 2021, Mayor Lori Lightfoot's budget for 2022 was passed. Included in the budget is a new program that is a bit of an experiment with providing a basic guaranteed income to low-income Chicagoans.
Lightfoot explained after passing the budget that she hopes to help working families by giving them help recovering from pandemic hardships.
“Having extra income consistently for some time can make the difference for the working poor who are living on the cusp of financial ruin,” Lightfoot said in remarks after the budget passed. “That’s why $35 million of the $157 million that we’re investing in family assistance programs will fund the largest pilot program in the country, providing $500 a month to 5000 families with cash assistance to lift them up out of poverty.”
What are the details of Chicago's program?
- $500 will be paid per month to 5,000 Chicago families.
- Participants must be Chicago residents enrolled in City Colleges or have a dependent enrolled in Chicago Public Schools or City Colleges.
- Participants must have experienced a negative impact from Covid-19 when applying.
- Income must be at or below 300% of the federal poverty guidelines.
- The funds come from President Biden's American Rescue Plan.
- Participants will be chosen at random, as long as they meet the qualifications.
Have guaranteed income programs been proven to be successful?
It's early on to know for certain how these programs will impact their communities. Other small cities have tried guaranteed income programs including Stockton, California.
The results coming from Stockton have been largely positive. In a report released recently, the Stockton Economic Empowerment Demonstration, or SEED, helped residents with income stability, find jobs, reduced anxiety and depression, and improved overall wellbeing.
According to the report, the program's goals were to provide, "A hand-up, rather than a hand-out, SEED sought to empower its recipients financially and prove to supporters and skeptics alike that poverty results from a lack of cash, not character."
SEED was a small program providing $500 per month for two years for 125 Stockton residents. Chicago and Los Angeles will provide a much larger template for determining if these pilot programs will be successful.
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