Tag: ubi

Chicago’s Guaranteed Income Guarantees Less Opportunity

There have been more than 150 guaranteed income pilot programs implemented across the country, but only one has made its program permanent – Cook County, Illinois.

The county, which includes Chicago, became the first place in America to commit to a taxpayer-funded program indefinitely, serving as the nucleus for expanding the scope of these programs nationally. Taxpayers and recipients beware.

A guaranteed income program is simple: Give low-income people a monthly amount of money to use as they see fit. These payments are in addition to other welfare benefits they receive, and don’t come with any requirements to work, to learn better money management, or to get job training.

The idea is to promote equity and help the poor and disadvantaged, a noble goal, but in practice it can harm families by reducing work, income, and opportunity.

They’re extremely expensive, too, and threaten to wreck the finances of any city or state that implements them with ever-higher taxes.

Cook County used $42 million in funds from the American Rescue Plan to run a two-year pilot program that provided 3,250 low- to moderate-income participants with $500 per month.

The results? One firm committed to “equitable economic development” found four apparent benefits.

Their modeling estimated that households directly spent 55.8% of the money received. The $42 million investment generated only $8.3 million annually for local businesses and a $5.4 million increase in annual economic output in Cook County. Generating $286,000 in tax revenue, $44,000 of which stayed in Cook County.

One concern with these findings is that no results from a control group were reported. There’s no way of knowing if the increases were a result of these 3,250 recipients or if it was simply a post-pandemic boon.

The county is continuing the program in 2026 at a cost of $7.5 million to local taxpayers.

Another study of a more rigorous Chicago-area pilot program with a control group found that the program discouraged participants from working and reduced their earned income.

Taking part in the pilot actually lowered participants’ earned income by $1800, excluding program payments. Recipients’ workforce participation dropped by 3.9 percentage points. 

Participants and, surprisingly, others in the recipient’s household, ended up reducing their hours worked per week. Children who grow up around full-time working adults are more likely to climb the economic ladder, so this reduction in work threatens the future of participants’ children.

Still, the appetite for guaranteed income programs is rapidly expanding in Illinois and nationally. Illinois allocated $827,272 in its 2026 budget to fund a pilot.

In October, Rep. Bonnie Watson Coleman (D-NJ) reintroduced the Guaranteed Income Pilot Act, with the stated goal of lifting people out of poverty. The federal program would select 20,000 participants.

Of them, 10,000 would receive “a cash payment each month equal to the fair market rent for a 2-bedroom home in the ZIP Code in which the eligible individual resides, or a substantially similar amount.” In Chicago, the payment would increase to $2,670 per month. In New York, it’d be $2910. A control group would contain 10,000 people.

A final report on the program would explicitly be required to study the feasibility of expanding the program. The goal of these programs – sometimes explicitly stated – is to cover more people.  

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Why Digital IDs, CBDCs, and UBI Will Be Eagerly Welcome

Here’s the story so far…

Poverty is Growing, Becoming More Common, and More Exposed

Recently, there has been a lot of talk about poverty. Mostly because during the government shutdown, the federal government food program, SNAP, ran out of funding. Out of some 330+ Million Americans, 42 million rely on SNAP to supplement their grocery purchases every month. In New York State alone, $770 million is spent by the federal government every month, and California, over $1 Billion. It’s a big deal.

As a result, there was a world’s share of celebrity lip-wagging and open wallets. Pop Star, Billie Eilish reportedly donated 25% of her wealth to those solving hunger in the United States. She also did as much as she could to call out billionaires like Elon Musk.

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New Study Raises Concerns Over Universal Basic Income Plans

In my forthcoming book, Rage and the Republic: The Unfinished Story of the American Revolution, I explore how the American republic can survive in the 21st Century given unprecedented economic, technological, and political changes.

The book addresses the increasing calls for a universal basic income (UBI). Various Democratic cities are already implementing UBI systems.

Now, a new study finds (as did some prior studies) that UBI systems have not achieved significant improvements and may actually have some negative consequences for recipients.

A working paper with the National Bureau of Economic Research shows that UBI recipients did indeed spend more money, including a 13 percent increase on child-related expenses. There was also a slight increase in parental supervision of children.

However, there was no improved school performance and a slight increase in reported developmental and stress-related problems with children.

Stanford’s Basic Income Lab is tracking more than 160 UBI projects in the U.S..

So far, the results are at best mixed.

One study in Compton showed that many recipients of the $500 monthly payment quit working part-time jobs.

Likewise, reports indicate that “a $400 monthly payment in Chelsea, Massachusetts, increased food spending and did not measurably reduce work, but it failed to produce results for the research team’s “primary downstream outcomes”—namely self-reported health and child school attendance.”

This follows earlier reports about the OpenResearch Unconditional Income Study (ORUS), an experiment in which lower-income Americans were given $1,000 a month for three years.

The result was a reduction in work and an increase in leisure activities.

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Department Of Duh… 2nd Paper Shows UBI Results In Less Actual Work

In October, I reported on the release of the largest research project ever on universal basic income (UBI). The study’s results were disappointing for advocates of the idea. In short, the research showed that many people who received the income reduced their hours working and increased leisure time. Furthermore, people didn’t use their leisure time in any of the productive activities advocates often claim (e.g., self-improvement, entrepreneurship, time with family).

In December, a National Bureau of Economic Research (NBER) study on UBI authored by economists Sidhya Balakrishnan, Sewin Chan, Sara Constantino, Johannes Haushofer, and Jonathan Morduch was released.

The study examined 2,097 households in Compton, California. They gave around one-third of the households a guaranteed monthly income of an average of $487 and examined how recipient households acted relative to the non-recipients.

Employment and Guaranteed Income

The most obvious impact of a guaranteed income is going to be on a recipient’s work decisions. Predictably, many people who received the guaranteed income reduced their working hours.

The researchers found that part-time workers (those who worked less than 20 hours per week) reduced their time working by 13 percent. Less time working means less money. How much less? The paper states:

The negative impacts on labor market participation translate into negative impacts on household income. While the average monthly cash transfer amount for the treatment group is $487… the net impact on total monthly household income over the past 30 days including the cash transfer was just $92 and not significantly different from zero.

This means that these part-time worker households who received a nearly $500 transfer ended up only being $100 richer overall, because they reduced their working hours. Furthermore, this $100 difference was not statistically significant, which means it’s unclear whether the transfer really leaves people with more income than before!

It should be noted that full-time employees did not significantly change their working habits. This fact also does not bode well for UBI advocates. Why?

Ask yourself, why would part-time employees work less, but full-time employees work the same amount? One explanation is that it is generally easier to pick up part-time work than it is to find a full-time job. As such, full-time workers were likely reluctant to leave behind their stable full-time jobs for a temporary guaranteed income. Additionally, an income of $500 per month is likely not enough to make up for the loss of a full-time job. So it’s unsurprising that this program didn’t affect the decisions of full-time employees.

However, if this program were a permanent government program, I would expect that some full-time employees would also leave their jobs or cut back hours. If you expect to get a guaranteed monthly stipend for two years, you aren’t going to quit your job, because you’re going to have to take on the cost of finding a new full-time job when it ends. However, if you’re going to get it forever, you’re more likely to do so.

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The Largest Study Ever On UBI Was Just Conducted, And…

In the 2020 election, an interesting candidate made his way onto the scene for the Democratic Party’s presidential nomination: Andrew Yang. Yang made a splash in particular for his promise to give everyone $1,000.

Andrew Yang’s campaign strategy took a similar approach to Trump’s 2016 campaign in hyper-focusing on a single issue. For Trump, the single issue was immigration. For Yang, that issue was universal basic income (UBI).

Yang’s version of UBI was alluring in its simplicity. Every person in the country would receive a nice, round $1,000 per month. It didn’t matter if you were rich or poor, old or young. A vote for Yang was a vote for cash.

Many from his own party denounced the idea of giving rich people $1,000 per month. But Yang held strong to the payment being universal. By making sure every person gets $1,000, you avoid some incentive issues and the bureaucracy that accompanies typical welfare programs.

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Oregon Voters to Consider Approving Nation’s First Universal Basic Income

Oregonians will vote in November on a controversial ballot measure that would give every resident, regardless of age or income, $1,600 each year—as long as they live at least 200 days in the state.

A family of four would receive $6,400 annually, with no strings attached. The money would be non-taxable and would not affect other benefits.

If voters approve Measure 118, the Universal Basic Income (UBI) program would be funded by a tax on the gross receipts of corporations that generate more than $25 million in annual sales.

Oregon would be the first state to roll out such a comprehensive UBI.

As of June 2024, no U.S. states have a UBI program, though several states and cities have run pilot programs.

However, the “Oregon People’s Rebate” proposal is meeting with stiff bipartisan resistance from elected officials and pushback from the business community.

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Bad News for Universal Basic Income

The largest study into the real-world consequences of giving people an extra $1,000 per month, with no strings attached, has found that those individuals generally worked less, earned less, and engaged in more leisure time activities.

It’s a result that seems to undercut some of the arguments for universal basic income (UBI), which advocates say would help lower- and middle-class Americans become more productive. The idea is that a UBI would reduce the financial uncertainty that might keep some people from pursuing new careers or entrepreneurial opportunities. Andrew Yang, the businessman and one-time Democratic presidential candidate who popularized the idea during his 2020 primary campaign, believes that a $1,000 monthly UBI would “enable all Americans to pay their bills, educate themselves, start businesses, be more creative, stay healthy, relocate for work, spend time with their children, take care of loved ones, and have a real stake in the future.”

In theory, that sounds great. In reality, that’s not what most people do, according to a working paper published this month.

The five researchers who published the paper tracked 1,000 people in Illinois and Texas over three years who were given $1,000 monthly gifts from a nonprofit that funded the study. The average household income for the study’s participants was about $29,000 in 2019, so the monthly payments amounted to about a 40 percent increase in their income.

Relative to a control group of 2,000 people who received just $50 per month, the participants in the UBI group were less productive and no more likely to pursue better jobs or start businesses, the researchers found. They also reported “no significant effects on investments in human capital” due to the monthly payments.

Participants receiving the $1,000 monthly payments saw their income fall by about $1,500 per year (excluding the UBI payments), due to a two percentage point decrease in labor market participation and the fact that participants worked about 1.3 hours less per week than the members of the control group.

“You can think of total household income, excluding the transfers, as falling by more than 20 cents for every $1 received,” wrote Eva Vivalt, a University of Toronto economist who co-authored the study, in a post on X. “This is a pretty substantial effect.”

But if those people are working less, the important question to ask is how they spent the extra time—time that was, effectively, purchased by the transfer payments.

Participants in the study generally did not use the extra time to seek new or better jobs—even though younger participants were slightly more likely to pursue additional education. There was no clear indication that the participants in the study were more likely to take the risk of starting a new business, although Vivalt points out that there was a significant uptick in “precursors” to entrepreneurialism. Instead, the largest increases were in categories that the researchers termed social and solo leisure activities.

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UBI Is the Trojan Horse of Economic Ruin

In an era where the siren song of Universal Basic Income (UBI) captivates many, we must critically examine the harsh realities beneath its alluring veil. UBI, with its promise of fixed income for all, irrespective of employment status, emerges not just as an economic folly, but a direct affront to the principles of liberty.

UBI represents a grand experiment in economic alchemy, an attempt to materialize prosperity from the fumes of fiscal irresponsibility. Proponents hail it as a cure-all for poverty, a silver bullet to eradicate financial woes. However, this illusion crumbles under scrutiny, revealing a scheme fundamentally at odds with individual responsibility and freedom. The redistribution of wealth, central to UBI, fosters a culture of entitlement creating a recipe for economic disaster.

There is nothing “universal” about the government picking the pockets of the industrious to line the wallets of others. This is not empowerment; it’s robbery and subservience dressed in the garb of charity. The government, acting as a paternalistic overlord, decides who gets what, how much, and when. UBI’s one-size-fits-all approach overlooks the diverse needs and challenges of individuals.

Economically, UBI is akin to quicksand. The idea that a state can indefinitely sustain its citizens without encouraging productivity is dangerously naïve. Such a system would lead to inflationary pressures, devaluing currency, and resulting in a vicious cycle of increasing handouts and decreasing value, ultimately stalling economic growth and innovation.

The fiscal implications are stark. Funding UBI would necessitate astronomical levels of taxation and debt, burdening future generations with today’s reckless financial decisions. This approach, effectively extorting Peter to pay Paul, where Peter represents the hardworking populace, undermines the foundation of a robust economy.

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CA pledges $5 million for cash payments to pregnant Black women

The state government of California has pledged $5 million to provide a “pregnancy basic income” to pregnant “mothers and other birthing parents.” However, they must be Black. All other races are being snubbed.

This money will fund the expansion of the Abundant Birth Project [ABP], a program of the San Francisco Department of Public Health [SFDPH]. ABP provides twelve months of cash payments to Black and Pacific Islander women who become pregnant in San Francisco County. Recipients must make less than $100k per year. These payments are referred to as “pregnancy basic income.” A group of self-described “anti-racists,” called Expecting Justice, operates the program.

Using state funds, pregnant Black women in Los Angeles, Alameda, Contra Costa, and Riverside Counties will now be eligible for twelve months of cash payments ranging from $600 to $1,000 per month. They can begin applying for this free cash at the beginning of 2023.

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Chicago’s Guaranteed Income Pilot Program Open To Illegal Immigrants

A Chicago-area guaranteed income pilot program will be open to illegal immigrants, who can apply for the chance to become one of 3,250 residents who will receive $500 per month in cash assistance for two years.

The only requirement for the program is that applicants must be adults residents of Cook County, and make less than 250% of the federal poverty level – or less than $69,375 for a house of four, Fox News reports.

Applicants will not be asked about citizenship status, according to the website.

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