Radical idea? Alderman proposes free money for some of Chicago’s poorest

It’s an idea that has captivated Silicon Valley tech titans and some intellectuals on both the far left and the far right.

President Obama gave a nod to the notion in a major speech on Tuesday.

And now a Chicago alderman is trying to plant a seed to see if what some are calling a radical concept can grow here.

It’s called a “Universal Basic Income.” The idea is to give poor people money — with no strings attached— at taxpayer expense. It’s designed to counter the nagging problems of stagnant wages for many Americans, almost non-existent savings and the prospect of joblessness driven by automation or trade.

A pilot program, proposed recently by Ald. Ameya Pawar (47), would put Chicago in the vanguard of those exploring a UBI by giving $500 a month to 1,000 Chicago families.

A resolution introduced by Pawar, a progressive torch-bearer on City Council, directs the mayor’s office to create a task force to explore a universal basic income for Chicago, starting with the 1,000-family pilot program. The resolution has more than 30 cosponsors, although it’s far from clear if it will ever become a political reality.

Pawar fears that given current economic forces, economic deprivation will deepen already dangerous divides across lines of geography, race, and class.

“If all of the sudden we’re investing billions of dollars in automating long-haul trucking, and those jobs start to go away — what kind of political conversation can you expect, when a whole swath of middle-aged white men are put out of work?,” Pawar said.

In Chicago, industries like hospitality and food services could be early targets of automation, Pawar said.

“What $500 a month is going to do is to get them over the hump: [help them] plan for emergencies, to have some money in the bank . . . put groceries in their refrigerator, food on the table, to pay for child care, to repair [their] car,” Pawar said.

A Chicago UBI pilot would join trials in Stockton and Oakland, California, Ontario, Finland, and suburban Cook County. Like several of those projects, Pawar hopes Chicago’s pilot can be paid for through donations from wealthy UBI supporters.

“What they’re planning is quite substantial. Are they going to be able to raise all that money philanthropically? That remains to be seen,” Saadia McConville, communications director at the Economic Security Project, which funded Stockton’s plan, said. “I can speak from experience in Stockton that it’s definitely not an easy task, but it is something that [donors] are interested in.”

Trials like the one proposed by Pawar could answer important questions about how a larger universal basic income program could best be set up, and the effect it would have on recipients, according to Damon Jones, an economist at at the University of Chicago-Harris School of Public Policy. Jones welcomed the study, which would be substantially larger than any existing project in the developed world.

Any trial that covered only a fraction of the population would leave some questions unanswered, including the question of how a large-scale program could be financed, Jones said. A report by the city government of Washington, D.C., concluded that a UBI in the district would be a substantial blow against poverty but cautioned that the revenue required might drive taxpayers into nearby suburbs and depress economic growth.

The Chicago-based Direct Giving Lab is conducting a $100-a-month, 20-family trial in north suburban Moraine Township and is planning a larger study in Chicago after the suburban one ends.

Pawar explored a mayoral run and briefly ran for governor last year. When neither panned out, Pawar decided to put forward the policy ideas he would have run on. In the end, he believes the specific prescription — be it a UBI or some other proposal — is less important than grappling with the headwinds of automation, inequality and wage stagnation.

“We are headed towards a perfect storm. And I think that the best way to prevent that perfect storm is to start having a conversation and piloting innovative public policies so that people can start to see a different path,” Pawar said.

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