by Andre Coelho | Sep 15, 2018 | News
Chicago’s City Hall building green roof. Picture credit to: Urban Matter
Earlier this year, the city of Chicago hit the news by introducing a resolution that would summon a taskforce to run and study a basic income trial within the Municipality. That resolution, put forth by Alderman Ameya Pawar, included the summoning of stakeholders, foundations, philanthropists and academics, to develop a basic income trial model providing an unconditional $500 /month to one thousand families in Chicago. This was in addition to the restructuring of the Earned Income Tax Credit (EITC), which will in itself be a subject of study.
That initiative received opposition from the Chicago Tribune, the most popular newspaper in the city. The paper published an editorial where it argued that the basic income trial was unaffordable and that Chicago officials should instead be finding ways to “raise incomes among working-class and poor residents”. Among the alternatives (to a basic income, experimental or full-fledged), the editorial referred to the deregulation of the private sector, which would “generate employment and boost incomes”.
Despite this opposition, Chicago leaders, including Mayor Rahm Emanuel and Alderman Ameya Pawar, just announced (through the Economic Security Project (ESP) the formation of the taskforce to which the resolution referred, having been called the Chicago Resilient Families Task Force. This cutting-edge group will explore and coordinate the basic income trial in the city, relying on an EITC modernization, which is how they will provide the monthly benefits to recipients.
The referred Task Force, in which the ESP is also investing, will be co-chaired by Tom Balanoff (Service Employees International Union President in Canada) and Celena Roldan (CEO of the American Red Cross of Chicago and Northern Illinois), and will include “civic, religious and community leaders in addition to elected officials and academics”. It will produce a report with specifications on the basic income trial, and put forward policies to reduce poverty and rise middle-class citizens incomes.
After Stockton, Chicago is now paving the way for furthering basic income in the United States, amidst a choir of opponents (including the above mentioned Chicago Tribune editorial and others).
More information at:
Kate McFarland, “CHICAGO, US: City Considers Resolution to Investigate Basic Income Pilot”, Basic Income News, July 24th 2018
Kate McFarland, “US: Chicago Tribune against basic income for the City”, Basic Income News, August 12th 2018
Peter Kotecki, “Chicago could be the largest US city to launch a basic income pilot — here are the other major experiments around the world”, Business Insider, July 23th 2018
Kate McFarland, “STOCKTON, CA, US: New Details Revealed in Planned Basic Income Demonstration”, Basic Income News, August 23rd 2018
Rowena Itchon, “Basic income comes to Stockton”, Pacific Research Institute, February 5th 2018
by Kate McFarland | Aug 12, 2018 | News
The Chicago Tribune, the most-read newspaper in the Chicago area, has come out in opposition to Alderman Ameya Pawar’s proposal to use the city as a test site for basic income.
Earlier this year, Pawar proposed legislation to create a task force to investigate a pilot study in which 1000 Chicago families would receive an unconditional basic income of $500 per month. Pawar’s resolution is still pending approval from the Chicago City Council and Mayor Rahm Emanuel. The Alderman has not proposed a specific means to finance such a pilot project, and has indicated in interviews that he envisions the project being supported at least in part through private philanthropy.
In an editorial published on August 6, the Tribune foregrounds the issue of cost in rejecting Pawar’s idea for a municipal basic income pilot study — or, all the more, a full-fledged municipal basic income:
“Pawar’s plan suffers from a number of flaws, the most obvious being: How would Chicago pay for it? Chicago has huge unfunded pension obligations, a lousy bond rating and rising property taxes. This pilot program would cost at least $6 million a year. When asked on WTTW’s ‘Chicago Tonight’ where the money would come from, Pawar had no answer.”
“Even if the Chicago City Council could find the money and the project proved a great success, what then? Expanding to include everyone — the term is ‘universal basic income,’ remember — or even a significant share of Chicagoans would be prohibitively expensive.”
In the editorial, the Tribune does not reject the idea of basic income itself, but deems it financially infeasible on the city-level and politically infeasible on the national-level:
“Realistically, given the sums required, a UBI would require a new federal initiative, which is not going to come from this president or this Congress. [Chicago] City Hall would be wiser to look for ways to help raise incomes among working-class and poor residents without taking on commitments it can’t afford.”
With regard to alternative strategies to raise incomes of the poor and working class, the Tribune suggests investment in and deregulation of the private sector (“There is no substitute for a thriving private sector to generate employment and boost incomes”), job-training or apprenticeship programs, and an expansion of affordable housing.
The Editorial Board concludes on a somewhat ambivalent note concerning basic income experimentation, as a poor allocation of money and priorities at present, but as something potentially worth pursuing if and when it becomes affordable:
“If Chicago becomes economically healthy and fiscally sound, it will achieve far more benefits for hard-pressed Chicagoans than Pawar’s pilot possibly could. And who knows? Prosperity-driven increases in city revenue might make ideas like his affordable.”
The Chicago Tribune has no official political alignment. Wikipedia classifies it as “conservative” (right-wing), while websites purported reporting on media bias have placed it as “left-center” (Media Bias/Fact Check), “center” (AllSides), and “leans conservative” (Boston University Libraries). The newspaper endorsed a third-party candidate, Libertarian Gary Johnson, in the 2016 US Presidential Election.
Reference
Editorial Board, “Instead of a Universal Basic Income for Chicagoans…,” Chicago Tribune, 6 August 2018.
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Reviewed by Dawn Howard
Photo: “Chicago” CC BY-NC-ND 2.0 Peter Miller
by Kate McFarland | Jul 24, 2018 | News
Alderman Ameya Pawar, one of fifty elected members of the City Council of Chicago, has introduced a resolution to convene a taskforce to investigate the implementation of a basic income trial in the city. According to the proposal set out in the resolution (which can be read in full here), the pilot project should provide 1000 families “with a minimum of $500/month, no strings attached,” with further details of the model to be established by the taskforce:
[W]e, the Members of the City Council, assembled this day on June 27, 2018[,] direct the Mayor’s office to empanel a Chicago Resilient Families Initiative taskforce to study Universal Basic Income and an Earned Income Tax Credit Modernization program.
The taskforce would carry out the following activities:
1. Create partnerships with city departments and external stakeholders, foundations, advocacy organizations, philanthropists, and leading public policy makers to launch a Universal Basic Income (UBI) Initiative in the City of Chicago.
This taskforce would be charged with developing a UBI model for 1000 families to be provided with a minimum of $500/month, no strings attached.
2. Scaling the City of Chicago’s Earned Income Tax Credit (EITC) smoothing program to the same 1000 family cohort.
The EITC smoothing would advance payments on a monthly basis. In addition, the taskforce would study the creation of a Chicago-based Earned Income Tax Credit Program.
Note that, if payments are made on a family rather than individual basis, the policy will not technically constitute a basic income as defined by BIEN; however, since the money is to be given with “no string attached,” the trial would examine a policy much closer to a true basic income than any existing welfare policies in the US.
As quoted above, the resolution additionally proposes to restructure the Earned Income Tax Credit (EITC), a tax refund available to low-income working Americans, for the families in the experimental sample so that they receive their the credit monthly instead of annually. This would not be the first time that Chicago has tested a “smoothing” of the EITC over the year: in 2015, Mayor Emanuel collaborated with a Chicago-based non-profit organization in conducting an experiment in which over 300 residents received their EITC payments only a quarterly basis.
Introduced in the 1970s, the EITC has generally been a popular program that enjoys cross-partisan support, and EITC expansion is sometimes viewed as a potential route to introduce a basic income in the US. At present, however, the tax credit is available only to those who have earned income, is means-tested, and primarily benefits parents (e.g., this year, example, single parents of one child are eligible to receive up to $3,400 if their incomes fall under $39,617, while individuals with no children may receive only up to $510 for the year, and only if they earn less than $15,010).
Pawar has introduced the resolution out of concern about existing poverty and economic insecurity in Chicago and the US as well as the threat of additional job loss to automation.
Alderman Ameya Pawar, CC-BY-3.0 Chi Hack Night
Is Basic Income on the Horizon in Chicago?
After an article about Pawar’s resolution appeared in The Intercept on July 16, a torrent of articles appeared in the popular media, often with headlines suggesting that Chicago is on the verge of testing–or even implementing–a universal basic income. In fact, many hurdles remain to be surmounted before even a pilot can be launched.
When introduced in June, Pawar’s resolution received support from 36 co-sponsors in the Chicago City Council. Before the proposed taskforce is convened, however, it still must be approved by official vote of the council, in addition to the support of Mayor Rahm Emanuel. Moreover, even if the taskforce is established, it will confront the task of not only designing but also fundraising for a basic income pilot project.
In interviews and social media, Pawar has commented on his inspiration from the Stockton Economic Empowerment Demonstration (SEED), a trial of a $500 monthly guaranteed income that has been financed entirely by private donors. Notably, SEED received a $1 million seed grant (pun noted) from the Economic Security Project (ESP), which was launched in 2016 by basic income advocates including Facebook co-founder Chris Hughes for the purpose of funding projects related to unconditional cash transfers.
When asked about the funding issue during an interview on Chicago Tonight, Pawar noted that “there is a lot of support in the philanthropic community” for basic income initiatives, and briefly mentioned that he has also “had initial conversations” with ESP. Meanwhile, ESP’s communications director Saadia McConville has been quoted in the Chicago Sun Times as saying, “Are they going to be able to raise all that money philanthropically? That remains to be seen,” adding, “I can speak from experience in Stockton that it’s definitely not an easy task, but it is something that [donors] are interested in.” One impediment to philanthropic funding will be the sheer size of the trial proposed by Pawar. In contrast to his goal of 1000 families, the SEED project has set a target of at least 100 recipients for its equal-sized cash grants.
If the taskforce is created, the resolution specifies that it must deliver a report on the basic income and EITC experiment to the City Council by October 1, 2018. Thus, more information can be expected this autumn regarding a model for the experimental trial, as well as potential avenues for funding.
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Post reviewed by Dawn Howard.
Cover Image CC-BY-2.0 Roman Boed
