The writer is a contributing columnist, based in Chicago
Money for doing nothing. In the American Midwest, with its legacy of a frontier work ethic, such an idea is all too easy to pillory. But now Chicago, the largest Midwest city, has launched one of the biggest no-strings-attached cash payout programmes in the US. This is the latest iteration of an idea that is becoming America’s newest weapon in a decades-long battle against urban poverty.
The pandemic has prompted a rethink of the American social contract on a scale not seen since my childhood in the 1960s — when white America seemingly discovered black poverty for the first time. Now, flush with federal pandemic funding, at least 32 US cities are piloting “basic income” payouts, usually to their poorest residents, according to Mayors for a Guaranteed Income. Chicago has budgeted $31.5m to give 5,000 low income households $500 a month for a year with no conditions. Los Angeles will pay 3,000 people $1,000 a month for a year.
“The pandemic has illustrated that you can give people money, and America is still America, it has not become a socialist nation, the flag is still red, white and blue,” says Michael Tubbs, former mayor of Stockton, California, referring to federal pandemic stimulus cash. As mayor in 2019 Tubbs started paying 125 residents $500 a month for two years, and now he heads Mayors for a Guaranteed Income.
Stockton participants spent at least one-third of the money on food, and some recipients leveraged the cash to find full-time jobs. “It shows that something as small as $500 can be a barrier for people to get to work, maybe it’s the cost of dry cleaning a security guard uniform, a little extra for childcare or the ability to take time off to interview for a full-time job,” says Tubbs. He says poverty “is not a moral failing but a systemic one”.
Zohna, 50, told the FT she wept when she received her first $500 Stockton cheque; she had to compose herself before saying: “I didn’t realise how much help I needed”. “I paid my tithe (to the church), I set up my car insurance and electric bill to pay automatically, I put gas in my car,” she says. Now the payments have ended and Zohna is fighting the effects of “long Covid” which keep her out of the workforce. She struggles even to pay her tithe to the church, which she considers her most important bill of all, and her car has been repossessed.
Nationwide, Democrats and people of colour generally support a “guaranteed” or basic income far more strongly than Republicans and whites, according to the UBI poll tracker, which follows polling on the topic. Michael Faulkender, who was the senior US treasury official responsible for implementing the Paycheck Protection Program in the Trump administration, is among those who oppose cash payouts without work requirements. “Our economy today has plenty of jobs that require minimal skills,” he told the FT, noting that many employers still struggle to fill job openings. “You don’t fix poverty by creating dependency,” he says.
Alderman Gilbert Villegas, a driving force behind Chicago’s new pilot, which will start sometime next year, told me “nobody is going to quit their job for $6,000 a year” given the high cost of living in this Midwest city. He credits an $800 a month payout to his widowed mother, in the form of social security survivor benefits, for allowing his family to survive after the death of his father when he was eight years old.
But are we just reinventing the wheel? Many anti-poverty payments in the 1960s and 1970s had no work requirement and largely failed to eradicate poverty. “I think there are a lot of things for which people have short memories . . . or they think it will work this time because I’m running it”, says Faulkender, noting that US society reached a consensus in the 1990s to reimpose work requirements for some income support. But Tubbs says the US is merely “picking up where the Great Society (Lyndon Johnson’s war on poverty) left off”.
Basic income is an idea as old as Thomas Paine, Martin Luther King and Milton Friedman, all of whom backed some version of it. Maybe it’s an idea which needed a pandemic to prove its time has come.
New basic income schemes divide the Midwest
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