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All eyes on Chicago as it launches the nation's biggest guaranteed-income programs

Crain's Chicago Business

Friday, August 5, 2022  |  Column  |  Corli Jay

Such efforts in other, smaller cities provide some clues as to how the money to needy families will make an impact.

Chicago is at the center of a national social experiment: guaranteed income for low-income residents.

In June, 5,000 Chicago residents received the first of 12 monthly payments of $500, no strings attached, as part of the Chicago Resilient Communities Pilot.

And Cook County has announced that its Promise Guaranteed Income Pilot will soon distribute $39 million to 3,250 low-income residents in monthly payments of $500 for two years.

“Together these pilots represent the largest investment in unconditional cash assistance in a single metropolitan area in the United States,” according to the University of Chicago Inclusive Economy Lab, which plans to measure the impact of both pilots. The programs are funded by the federal American Rescue Plan.

Cook County also has funding from the Coronavirus State & Local Fiscal Recovery Funds program.

All eyes will be on these two pilot programs.

The UChicago Economy Lab will give participants the opportunity to share their experiences. “We’ll be conducting an impact evaluation that aims to understand impacts across things like financial stability, long-term economic mobility, well-being and mental health,” said Carmelo Barbaro, the lab's executive director.

Barbaro said that in addition to looking at how these pilots compare to others around the country, they are also interested in comparing the two programs, as the county program lasts for two years while the city pilot lasts 12 months.

What might we expect from UChicago’s study? Looking at programs in other cities may hold some clues. More than 80 cities have adopted guaranteed-income pilots, including Atlanta, Los Angeles, Philadelphia and San Antonio, according to Mayors for a Guaranteed Income, or MGI.

In Birmingham, Ala., Embrace Mothers, a program in partnership with MGI, gave 110 single mothers monthly checks of $375 for a year. Recipients began receiving payments in March.

The money allowed one participant to skip shifts from her second job for daily tasks and played a role in buying gas, housing supplies and clothing for her children.

“Across the country, pilot programs that offer this guaranteed income have measurably improved the lives of its participants, because now they have the flexibility to use funds in a way that benefits their family’s long-term economic health,” said Audra Wilson, CEO of the Shriver Center on Poverty Law.

Wilson says these monthly income programs give people the freedom to use the money in ways that best benefit them instead of being stuck inside the narrow constraints of other aid programs like the Supplemental Nutrition Assistance Program or Temporary Assistance for Needy Families.

In 2019, Stockton, Calif., became the first in the country to conduct a guaranteed income pilot.

The Stockton Economic Empowerment Demonstration, or SEED, distributed $500 for 24 months to 125 residents who lived in neighborhoods with a median income of below $46,033.

Key findings from SEED showed that recipients were healthier, with less depression and anxiety, and the monthly payments reduced month-to-month income fluctuations and enabled recipients to find full-time employment (28% had full-time jobs in 2019; 40% were full-time in 2020).

SEED found that once basic needs were met, the capacity for goal-setting and risk-taking were created.

Do the results of other programs show how successful the Cook County and Chicago programs could be?

Most programs launched in the past several years are very small and can be risky to draw conclusions from, Barbaro said. “That’s part of the reason that I think it’s so great that the city, which is operating the biggest pilot in the country with 5,000 participants, committed from the very beginning to do a really rigorous research study.”

The Shriver Center is working alongside the Economic Security Project to make guaranteed monthly payments a reality on the federal level.

After Congress let recurring payments of expanded child tax credits expire at the end of 2021, which cut child poverty significantly, representatives at the Shriver Center are hopeful that the results of city and state programs—like those in the Chicago area—will sway federal policy makers to make such measures permanent.

“We (have) heard this narrative from people who oppose those things,” said Jeremy Rosen, director of economic justice at the Shriver Center. “That they would keep people from working, that they would keep people mired in poverty, that they wouldn’t help families advance. And what we saw was, in fact, exactly the opposite.”