Guaranteed Income

Q. What is the difference between Guaranteed Income vs. Universal Basic Income?

 

A Universal Basic Income (UBI), is an amount that can sustain cost of living without any additional income which goes to all residents of a given area (city, state, country).

 

A Guaranteed Income is a version of UBI that provides an  amount which is substantial but not enough to live off alone, and goes to every eligible person within a defined population (such as everyone at or below the poverty line in a given region).

 

Q. How are the different pilots around the world or US paid for typically?

 

Most basic income pilots in the US and abroad to date have been funded by private philanthropies and grant-making foundations.

 

In some locations the basic income was or is paid for by the government. For example in Canada, the government allocated existing social services budget to the basic income pilot. And in Alaska, where residents receive a guaranteed annual cash transfer (The Alaska Permanent Fund Dividend), the cash transfers are paid by the State’s oil revenues.

 

Q. How are you going to make sure that this pilot actually become a city policy? Do you have a plan to scale?

 

A pilot is our first step in the plan to scale. By piloting the policy with a small population, we are testing the feasibility of expanding it. Through the pilot, will be able to monitor the policy’s impacts on Chicagoans and refine it accordingly. We will also be developing the administrative end of the policy to make it as beneficial and efficient as possible by coordinating with government agencies and local community organizations on implementation and integration with existing services.

 

Q. What is “guaranteed income”?

 

Guaranteed income policies are a bold and innovative approach to ensuring a basic quality of life and dignity for all people, addressing both entrenched poverty and changes to the nature of work such as automation. These programs provide regular payments of cash, or income, to people with minimal eligibility requirements or conditions on how that money must be spent—it is guaranteed.

 

Q. Why create a guaranteed income policy?

 

A guaranteed income policy can help us address many of the economic and social challenges we face in the 21st century. Income inequality is at its highest rate since 1928-- right before the Great Depression. Growing rates of inequality are a symptom of structural changes in our labor markets: real wages have failed to rise with productivity and inflation since the mid 1970s, and an increase in part time and temporary work makes it difficult for many to find the security they would gain from a full time job. Guaranteed income can compensate for these trends. By ensuring a fixed standard of living as a right of citizenship, it can empower working people to invest in their present lives and their future.  

 

Q. How does a Universal Basic Income compare to existing benefit programs in the United States?

 

The primary advantage that a UBI holds over existing benefit schemes in the United States is precisely that it’s universal. Safety net programs like disability benefits, child care assistance, and housing subsidies all prioritize the well being of citizens who are working, married, and have children. Single parents, childless adults, and the unemployed or underemployed tend to fall through the cracks of the system. Cash transfers can provide all individuals with the ability to make choices about their lives, irrespective of their demographics.

 

Q. Why do a guaranteed income pilot in Chicago?

 

The challenges economic and social challenges we face as a global community clearly manifest in Chicago, where 1 in 5 residents falls below the poverty line, and median earnings fall far below the cost of living. A pilot can help Chicago residents and policymakers better understand how guaranteed income impacts the lives of people on the ground before scaling up to a full program. Given Chicago’s diversity of people and neighborhoods, a pilot will allow researchers and residents to learn about how a guaranteed income policy can be best tailored to the particular needs and challenges facing each of these communities.

 

Q. How would the guaranteed income pilot work?

 

The pilot would identify 1,000 people in neighborhoods across Chicago to receive $1,000 per month for 18 months. Because a guaranteed income policy is intended to impact the lives of those facing financial instability, participants in the pilot would need to have incomes below the Chicago area’s median income in order to enroll.

 

This design was chosen to ensure that the size of the pilot would be large enough to study outcomes from many different types of people and communities, and over a long enough time for the guaranteed income to make a multidimensional impact on the lives of participants.

 

Q. Are other people working on guaranteed income pilots or policies?

 

Here is a table of current ongoing basic income-related pilots in the U.S., it is subject to change as projects develop.

 

The basic income pilot in Ontario, Canada represents the largest cash transfer experiment in North America. 4,000 Ontario residents will receive between $1,400 and $2,000 a month for a period of 3 years beginning in 2018. The program is meant to supplement existing benefits in order to care for those who are underserved by the existing benefit system. A change in government recently resulted in early cancellation of the pilot, but transfers are continuing through March 25th, 2019 and the pilot may be extended depending on a court decision.

 

In Stockton, California, monthly disbursements of $500 will be made to 100 participants for 18 months beginning in 2019. In this case, the transfers are aimed at poverty reduction for residents who make below the median income level, rather than providing a liveable stipend.

 

The Magnolia Mothers Trust in Jackson, Mississippi is another small pilot launched in December of 2018. It will provide $1,000 a month to 15 black mothers who are residents of the city. This program is specifically designed to address the racial and gender-based facets of poverty.

 

Finally, the Y Combinator Basic Income Demonstration is a privately funded and implemented randomized control trial which will ultimately include a 1,000 person treatment group and a 2,000 person control. Monthly cash transfers of $1,000 will be disbursed to recipients for 3-5 years, constituting the largest income pilot announced to date.