Chicago could become largest US city to test basic universal income for families

The city of Chicago might become the largest U.S. city to test a universal basic income program, The Intercept reported.

Alderman Ameya Pawar recently introduced legislation that would hand out $500 a month to 1,000 families in the Windy City. In addition to the no-strings-attached cash payments, Pawar's proposal would modify the Earned Income Tax Credit program for those families, so they would receive EITC payments on a monthly basis rather than at the end of the year.

The majority of the city's lawmakers have jumped on board with Pawar to co-sponsor the plan.

What's the story?

Pawar told The Intercept that he's concerned about the future of automation and how it could put millions of Americans out of work, which he believes would lead to more political polarization.

“From a race and class perspective, just know that 66 percent of long-haul truck drivers are middle-aged white men,” Pawar said. “So if you put them out of work without any investment in new jobs or in a social support system so that they transition from their job to another job, these race and class and geographical divides are going to grow.”

The lawmaker hopes the city council will start working with Mayor Rahm Emanuel soon to approve and implement the plan.

“Nearly 70 percent of Americans don’t have $1,000 in the bank for an emergency,” Pawar told The Intercept. “UBI could be an incredible benefit for people who are working and are having a tough time making ends meet or putting food on the table at the end of the month. … It’s time to start thinking about direct cash transfers to people so that they can start making plans about how they’re going to get by.”

What's Chicago's poverty level?

Approximately 21.7 percent of the population in Chicago were living in poverty in 2016, according to the most current data from the U.S. Census Bureau. The median household income was $50,434 during the same period.

Have other U.S. cities or states tried universal income?

Yes, the city of Stockton, California, recently granted 100 residents a $500 per month universal basic income.

The program will launch in 2019 and run for 18 months before officials decide whether to make it a citywide program. Stockton is about 80 miles east of Silicon Valley, which is the wealthiest region in the country and home to the nation’s tech industry.

Alaska residents have been receiving annual payments from the Alaska Permanent Fund since 1976.

The state government invests residuals from oil on public lands into public and private equities, real estate and other assets to generate revenue to make the payments to Alaskans. In 2017, the payment was about $1,100.

(H/T: The Intercept)