Chicago Considering $6 Million Universal Basic Income Pilot

Citing the danger automation poses to low-income jobs, Chicago Alderman Ameya Pawar wants to hand cash to every man, woman and child in the city according to The Intercept - while the city's broken pension system has already saddled every resident with $11,000 of debt.

Pointing to investments in autonomous vehicles by companies like Tesla, Amazon, and Uber, Pawar observed that long-haul trucking jobs, historically a source of middle-class employment, may become obsolete. More people out of work means more political polarization, says Pawar. ”We have to start talking about race and class and geography, but also start talking about the future of work as it relates to automation. All of this stuff is intertwined.” -The Intercept

A one-time hopeful for Illinois governor until he was outspent by two billionaires, Pawar has waxed eloquent over politicians who pit groups of poor people against each other to sow discord. 

“You know, the British pit Hindus and Muslims against one another,” Pawar told The Intercept at the time, drawing on his Indian-American heritage. “Pit people against one another based on class and geography, caste … this is no different. Chicago versus downstate. Downstate versus Chicago. Black, white, brown against one another. All poor people fighting over scraps.”

And with dwindling jobs due to automation, the Chicago Alderman is making the case that Universal Basic Income (UBI) is the only solution. 

Pawar thinks that one way to battle racial resentment is to address the economic precarity that politicians have used to stoke it. He has decided to endorse the universal basic income — an idea that has been picking up steam across the world.  -The Intercept

“From a race and class perspective, just know that 66 percent of long-haul truck drivers are middle-aged white men,” he observed. “So if you put them out of work without any investment in new jobs or in a social support system so that they transition from their job to another job, these race and class and geographical divides are going to grow.”

Proponents of Universal Basic Income want an alternative to the current system of distributing goods in-kind, as is the case with the Supplemental Nutritional Assistance Program (SNAP). They say that cash transfer programs (UBI) "sidestep the administrative costs of distributing in-kind goods," reports The Intercept, while avoiding the stigma of food stamps. 

To that end, Pawar has rolled out a pilot proposal for UBI which would go to 1,000 households: 

Pawar recently introduced a pilot for a UBI program in Chicago. Under his program, $500 a month would be delivered to 1,000 Chicago families — no strings attached. Additionally, the proposal would modify the Earned Income Tax Credit program for the same 1,000 families, so they’d receive payments on a monthly basis instead at the end of the year — a process known as “smoothing” that enables families to integrate the tax credit into their monthly budgets. -The Intercept

Pawar has convinced most Chicago lawmakers to co-sponsor the plan, and he is hoping that Mayor Rahm Emanuel will work with the Chicago City Council to implement it. 

Nearly 70 percent of Americans don’t have $1,000 in the bank for an emergency,” Pawar told The Intercept. “UBI could be an incredible benefit for people who are working and are having a tough time making ends meet or putting food on the table at the end of the month. … It’s time to start thinking about direct cash transfers to people so that they can start making plans about how they’re going to get by.” -The Intercept

On Tuesday, Emanuel's old boss, former President Obama advocated for Universal Basic Income while speaking at the 2018 Nelson Mandela lecture

If Pawar's plan is implemented, Chicago will be the largest city to test a UBI scheme. UBI advocate and founder of the People's Policy Project told The Intercept that he's skeptical about large municipalities running successful UBI programs because of a large city's limited capacity to collect revenue.  

“This looks like a UBI pilot program, which is a good idea, just to study its effects and produce data that can help guide other UBI efforts,” he told The Intercept.

“Our hope, that I know will be born out in this pilot, is that it will show that when we smooth out the EITC, and we provide a monthly basic income to 1,000 families, that they will be able to plan for expenses, they can make decisions about savings, they can make decisions about investing, they could make decisions about how they could deal with a financial emergency, just like all families do,” Pawar told The Intercept. “And once implemented, we’ll be able to hopefully scale it.”

That said, to Pawar - the question isn't whether the United States can afford to implement UBI, rather, whether it can afford not to

My response to Amazon, and Tesla, and Ford, and Uber … we need to start having a conversation about automation and a regulatory framework so that if jobs simply go away, what are we going to do with the workforce? … If [those companies are] reticent to pay their fair share in taxes and still want tax incentives and at the same time automate jobs, what do you think is going to happen?” Pawar asked.

“These divisions are going to grow and, in many ways, we’re sitting on a powder keg.”

To give Chicago's entire population of 2.7 million a check for $500 per month would cost $1.35 Billion per month, or $16.2 billion per year. Considering the city's $71 billion debt load - of which around $40 billion is pension debt, UBI would add nearly 23% per year to that ticking time bomb.

But hey, it's a nice thought we're sure will translate to lots of votes. 

Comments

Billy the Poet NidStyles Tue, 07/17/2018 - 22:04 Permalink

Following World War II cargo cults developed on Pacific Islands in which natives imitated US soldiers and built dummy equipment in order to once again attract American supply planes and goods.

Pictures: https://www.google.com/search?q=cargo+cult&source=lnms&tbm=isch&sa=X&ve…

Now America itself has become a cargo cult. Enterprise has been discontinued in favor of sympathetic magic.

In reply to by NidStyles

caconhma Juggernaut x2 Tue, 07/17/2018 - 23:17 Permalink

First, 3rd-world people came to the USA. The next, the USA becomes the 3rd-world country.

And all started with the Jews fight for "human rights and equality". Then came "Jewish diversity" and finally there will be the real concentration/extermination camps, gas chambers, and crematoriums.

PS

Please, don't tell it to the Indian guy. He will not ever understand the real world. This is why there are always were/are 3rd-world people who always live in shit.

In reply to by Juggernaut x2

NumberNone Tarzan Tue, 07/17/2018 - 22:49 Permalink

Maybe it's just the skeptic in me, but I'm finding it hard to understand 'dignity and purpose' as a measure of success for any program that hands out tax dollars with no strings.  With that said, I look forward to paying tens of thousands in taxes so that I can get a $500 check from the government.

In reply to by Tarzan

DaiRR Tarzan Tue, 07/17/2018 - 22:53 Permalink

Another familiar proposal by a DemoRat Socialist politician.  These proposals have one thing in common:  Attempts to get more votes from the "gimme gimmes" by promising to give them other peoples' money.

DemoRats will rule forever once their open borders tips the balance.  BUILD THE WALL !  CREATE SANE IMMIGRATION LAWS !

In reply to by Tarzan

Endgame Napoleon tenpanhandle Wed, 07/18/2018 - 12:51 Permalink

Hmmm, I did not know that Obama enforced the UBI. I have mixed feelings about it, even though it is an attempt to make the welfare-rigged labor market fairer for NON families.

Not sure why they are selling it by using the word “family” over and over again. It is not low-earning womb producers, but the single and childless, non-custodial parents and parents with kids over 18, who are destroyed in the welfare-rigged labor market. 

Families with single breadwinners—single moms and legal / illegal immigrants who often have male-breadwinner households—get WAY more than just food stamps, albeit the on-average EBT allotment for an illegal alien household ($450) was more than I made in a week as a single, childless college graduate, working at the Department of Human Services.    

“Families” who fall under the income limits for the program(s) get monthly cash assistance, electricity assistance, up to $6,431 in refundable child-tax-credit money and subsidized daycare so that single-earner parents can work part time, staying under the income limits for welfare in their “voted best for moms” jobs, where “the women we have working here have somethin’ conin’ in.”

This rigging drives wages, hours and job accessibility  down for millions of citizens who lack unearned income from .gov. Maybe, the UBI would help level the playing field. 

Not sure, though. 

Because dual-earner families are doubling up on breadwinner jobs with benefits, decrying the fact that they lack paid pregnancy leave despite an enormous amount of automation-aided excused time off in their family-friendly jobs, halving the size of the college-educated middle class and letting $9-per-hour NannyCam-surveilled babysitters or elderly grandparents raise their kids.

They, too, would get this UBI.

It would be good if a UBI supported stay-at-home parenthood, freeing up some jobs for Americans who lack a spousal income, but it would probably have the reverse effect: making more moms chase absenteeism-friendly mom-crony jobs, with the UBI bumping up family income enough so that they could pursue a posher lifestyle.

I’d be rich if I had a dollar for all of the moms I have seen, with ample spousal income to support the household in style, taking the low-wage office jobs in safer areas of cities.

They leave work every day at 2:30, and for whole days and weeks, doing it for things like baby travel soccer. They far exceed their PTO and pregnancy leave. They are above firing, watching each other’s backs in mom-protection rackets.

In the bigger back offices, they have lots of mom-bonding rituals, like baby-mommy-look-alike-bulletin-board-decorating contests. In sales offices, they leave phones ringing off the hook with paying customers, and they bully out the “non culture fits” who come to work every day, stay all day and meet the sales generation and account-retention numbers every month. 

You might say what do I care if they get $500 if I do, too? Good point. But some of the UBI proposals give families way more, like $2,000 per month (the equivalent of a $12-per-hour job), while both parents will still take a job.

I realize that families have higher basic bills, like electricity and rent, even though they really just pay a little more for extra rooms and heating / cooling. Single people pay almost as much for a one-room apartment.

Of course, families have other major, added monthly expenses, such as car notes, gasoline and car insurance for all of their little kids—-NOT. They also get bigly family discounts on every product that they buy and hugely tax credits from the progressive tax code. 

In truth, it is the single people—living on earned-only income, with no pay-per-birth freebies—who get the short end in every program out there except SS and Medicare. In fact, single people are often worse off after these programs are launched. 

Take Mit’s Romneycare. NPR did a segment on that, revealing who was left out of that plan. In every single case, it was either a childless, single woman—working in one of the low-wage, female-dominated jobs, where 90-something percent of women still work—or a single mom with kids over 18. One of those moms said it outright, concluding that her premiums were not subsidized enough to do her any good because of lacking children under 18 in her household. 

I am skeptical of any program that 1) does not provide an across-the-board amount that goes to everyone with no playing favorites, 2) any program that is not contributory with beneficiaries taxed for it just like the rich and 3) any program that does not greatly limit the amount that is given out. 

There are always unintended consequences, like the fact that rent prices will probably spike when landlords find out that people are getting $500. In every place around here where rent looks a little more affordable, you will find that wages are $1 or $2 per hour lower. 

That will not impact the dual-earner womb producers in those UBI proposals for “families” with two spouses bringing in an income, but if a single, childless person’s rent goes up by $200, it will reduce the amount of extra money in proportion to all of the major bills that must be financed by one, earned-only income steam. 

Granted $300 would help, certainly in terms of navigating the churn-job world, where many people are just going from one part-time or temp gig to another gig, with no UC to cover rent between churn jobs due to the incredibly unprofessional way that crony-absentee parents use non-absentee hard workers to bump up their numbers and then bully them out. 

Now, the above-firing and well-vacationed busy-working families do not have to worry about that. They take two of the more secure jobs, taking days, mornings, afternoons and weeks off with no repercussions, and if a job ends, they have another household income to fall back on....Or, they have a child-support check that covers the rent on a posh apartment, plus the UBI.

I see a lot of people in crony-parent jobs taking a lot of time off, likely due to the fact that advanced software does more and more of their work. This is as true for the dual-high-earner parents as it is for the low-earning single moms, strategically staying under the income limits for multiple welfare programs by working [officially] part time. Or, they work slightly higher paying temp jobs, forfeiting the monthly welfare for those months, but still collecting it for the other months, along with their up to $6,431 in refundable child-tax-credit money. 

There is already NO incentive to work harder. For “non culture fits,” living on one steam of earned-only income, hard work and performance NUMBERS do not even lead to job longevity in this crony-rigged system, much less to enough income to finance an independent household.

Single moms get higher paychecks due to the progressive tax code and .gov-financed monthly bills for working far fewer hours. Their $6,431 refundable child tax credits alone equal 1/3rd of the yearly, earned-only income of single, childless people and single parents with over-18 kids, facing rent that soaks up more than half of monthly pay.  

Would a UBI help hard workers get something out of work?

Sure, if it is really fiscally sustainable, it would, but unless it is truly simplified and limited, it will probably be gamed by the same people who are gaming the other multitude of government programs. 

It is generous that mega-rich people, like Buffet and others, are advocating for a UBI that they would be taxed heavily for. You have to wonder, however, if it would be sustainable, particularly on top of all of this other assistance, like $6,431 refundable child tax credits.

Of course, the UBI plans that appear less fiscally crippling, like Murray’s, replace [all] of the social programs, even SS, substituting a [smaller] amount of monthly assistance. 

Thing is, SS, as originally designed, is very different than these other programs. First and foremost, it is contributory, taking either 7.65% or 15.3% of every penny we all make up to the $128,400 taxation cap.

THAT is why it has no social stigma: the contributory aspect. 

It was designed not to milk the rich who pay more in terms of total amount, but not in proportion to the impact on their household budgets. 

The only group that SS screws is the modestly self-employed, like mom & pop shops and piecework contractors, who pay 15.3% SS tax on every $80 gig, whereas part-time-working single moms with welfare-subsidized rent and groceries and $6,431 in refundable child-tax-credit money only pay 7.65% into the SS trust fund and 0.00 in income tax.

SS does support stay-at-home motherhood, which is good, since that was always unpaid work, and every mother who raises her own kids, rather than taking a job that someone with no spousal income needs, helps to keep underemployment down in this underemployed country. They sacrifice an earned income. 

But for the most part, SS was meant to just be insurance for the crippling decrepitude that some face in old age. Some old people stay more agile, albeit all are less employable during some years in old age. 

SS also has insurance components for other extreme life occurrences, like the death of the parent of a minor child or true disability. It was originally designed to be [limited]. 

Any UBI that is affordable in any way addresses some of these things, while cutting the money for elderly people. In a country with lower marriage rates, where fewer people will have paid-for homes in retirement, people better ask themselves whether a rent expense for elderly job seekers is feasible, even with a $500 or an $800 UBI. 

Ar this level of automation, I think it would be better to reduce the pay-per-birth incentives for part-time work, while making stay-at-home parenthood in married households more feasible, thereby freeing up some jobs for those without spousal income. Child tax credits—refundable or non-refundable—do NOT do that. They do allow “busy-working” parents to finance a lot of $900 tattoos, beach trips to Florida to copulate with boyfriends and kitchen redos.

A more limited—but fairer—UC system would probably take care of the biggest issues that most underemployed single earners have.

Unemployment Compensation should be independent of corrupt, crony-mom absenteeism gangs, going to everyone between churn jobs, just for one month, rather than extending to up to a year for some groups, while others get 0% UC.

Rent is the biggest problem for most of the underemployed, and automatic, but limited, UC would reduce the panic between churn jobs, giving you time to secure another churn job.

You can get low-wage churn jobs easily, but it can take more or less time. UC should be automatic and limited to one-month spans, a couple of times a year.  That would be enough to finance rent, groceries and transportation until you get your first low paycheck in your new churn job———————-as much as one month later in many cases. If UC were limited to 1 month, and available only 2 times per year, it would be hard to abuse. You could not just work a churn job, getting on UC the next month, rinse and repeat.  

 

In reply to by tenpanhandle