“There Are So Many Needs:” LA and Chicago Launch Nation’s Largest Guaranteed Basic Income Programs

As millions of Americans continue to feel the financial fallout from the coronavirus pandemic, two of the country’s largest cities are committing millions of dollars to help struggling families.

Los Angeles and Chicago are both rolling out Guaranteed Basic Income pilot programs that will provide monthly payments to low-income residents for one year. The LA program, dubbed BIG: LEAP, will provide 3,200 people with $ 1,000 per month and the Chicago initiative will provide $ 500 per month to 5,000 residents.

The recipients of the two pilots will be drawn by lot.

Applications for the Los Angeles initiative closed on Friday, but Chicago is still hammering out the details of its program. Both are expected to launch next year.

The programs will be the largest of their kind and will build on the momentum generated by smaller initiatives like the two-year pilot project in Stockton, Calif., Which has increased full-time employment for participants and reduce anxiety and depression. Basic income programs have also been tested in Finland, Kenya, Brazil and several other countries.

About 40 other U.S. cities have considered or implemented similar efforts, according to Mayors for a guaranteed income, including Minneapolis, Denver, Newark, Pittsburgh, San Francisco, New Orleans, and Compton, California.

In July, Los Angeles County supervisors approved a three-year pilot program for residents between the ages of 18 and 24, and California is also exploring the possibility of launching a statewide initiative.

Can it work on a larger scale?

While previous attempts to provide direct cash aid payments have largely yielded positive results, economists wonder if similar programs can be successfully replicated on a large scale.

“The [federal] The child tax credit, as well as the stimulus, showed that there were holes and that some people were excluded from these kinds of big government programs, ”said Stacia West, director of the Center for Guaranteed Income Research at the University of Pennsylvania and professor. at the University of Tennessee.

“Part of what we’re looking at is which disbursement mechanism works best for specific populations and my feeling is that a one-size-fits-all approach won’t work. “

The idea of ​​providing direct cash assistance to low-income residents has been thrown for generations by economists, lawmakers and community leaders, and gained tremendous momentum during the pandemic.

According to census data, 18.4 percent of Chicagoans live in poverty, compared to 18 percent of Los Angeles residents, which is higher than the national average of 11 percent. The number of Americans living in poverty globally declined during the Covid pandemic due to massive stimulus measures passed by Congress early in the crisis, the Census Bureau reported in September.

“We are so badly needed in this city,” said Abigail Marquez, general manager of the Department of Community Investment for Families, senior administrator of the Los Angeles program.

Stockton test case

Even before Covid-19 spurred a federal stimulus, Basic Income gained national attention after 2020 presidential candidate Andrew Yang added the so-called Freedom Dividend, which reportedly provided 1 $ 000 to every American adult for a year, at his platform.

“We know that politics has to come to the federal level,” said former Stockton mayor Michael Tubbs, who led his city’s program in 2019. “We also know that cities are laboratories of democracy and often, especially in this hyperpolarized time that we live in, mayors have the ability to break noise and pilot policies.

Key findings from the first year of Stockton’s program showed that the guaranteed income reduced income instability, helped beneficiaries find full-time employment, and improved mental and general well-being, according to one. report released earlier this year.

“The fact that two of the country’s three biggest cities are so daring and have a guaranteed income means so much,” Tubbs added. “It creates even more evidence and more people supporting this idea.”

While Stockton’s program has been funded by donors, Chicago and Los Angeles are investing money from the city budgets for their initiatives. Chicago has pledged $ 31 million for its program and LA will pay some $ 38 million, including $ 11 million that was cut from the Los Angeles Police Department’s budget after last summer’s uprisings over the death. of George Floyd in Minneapolis.

The challenges of large-scale implementation

When translating to large cities, economists say there are two main concerns researchers will take into account: the impact of losing perks, like Section 8 vouchers or SNAP perks, and the how the money will be distributed to those who are entitled to it.

In Los Angeles, administrators are calling on public agencies to lift restrictions imposed by public agencies to protect participants’ existing benefits, Marquez said.

“If you are a single parent, for example, the value of these programs beyond the welfare programs that currently exist is unclear,” said Gary Painter, a public policy expert at the University of California. South. “On a large scale, we’re going to be thinking seriously about how this source of income is treated by other programs and I haven’t heard this discussion in a broad sense.”

Another potential challenge for large cities is to gain and maintain trust. Many people eligible for government programs are used to being untrustworthy, so there needs to be a more person-centered approach not only to dispersing money but also tracking data, West said.

“Guaranteed income really needs to part with that paternalistic ‘you are a number, you don’t matter, there is something wrong with you’ and the internalized social stigma of individuals”, a- she declared.

While Chicago and Los Angeles are among a growing number of cities offering income assistance, the proposals have not come without backsliding.

In Chicago, 20 members of the city’s black caucus said the program should be canceled and funding should be diverted to violence prevention and reparations for black residents, the Chicago Tribune reported. Other lawmakers opposed the program because they felt it would discourage residents from working.

“Classic business models imply that if you have more money you work less, but in Stockton’s experience it was exactly the opposite. We’ve seen them increase their participation in the workforce and be more successful in the workforce, ”said Stephen Ross, professor of economics at the University of Connecticut. “It will be interesting to see if the bigger drivers show the same. “

Alicia Victoria Lozano reported from Los Angeles and Safia Samee Ali from Chicago.