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Chicago Alderman Proposes UBI Experiment

August 14, 2018

Chicago alderman Ameya Pawar (D–Ward 47) is calling for the city government to study the idea of a government-administered universal basic income (UBI) pilot program to provide 1,000 families with a $500 payment every month.

Chicago alderman Ameya Pawar (D–Ward 47) is calling for the city government to study the idea of a government-administered universal basic income (UBI) pilot program to provide 1,000 families with a $500 payment every month.

Pawar and 36 cosponsors are behind Resolution 681, a nonbinding legislative call requesting Chicago Mayor Rahm Emanuel create a “Chicago Resilient Families Initiative” task force to study whether universal taxpayer-funded income payments promote prosperity.

Expects Failure

Anthony Davies, an associate professor of economics at Duquesne University and a policy advisor for The Heartland Institute, which publishes Budget & Tax News, says although the UBI may sound good, it would turn into just another welfare program in practice.

“A UBI has the potential of going one of two directions,” Davies said. “If a UBI could, in theory, replace everything we already to do to help the poor and disadvantaged, like food stamps and housing subsidies, there could be an upside. It could create a lot less friction when it comes to the conjunctions of all of these governmentally regulated programs. This is the upside, and it could be beautiful, if done correctly.

“What will probably happen is that a UBI will be put into place on top of the systems we already have, and what this is going to do is take from a system that is holding people in poverty and just create an even bigger system holding people in poverty,” Davies said.

Creating yet another entitlement program would further increase the tax burden on Chicago residents while not delivering any net benefits, Davies says.

“This will all negate the possible positive effects it could have, on top of creating an even higher tax burden for the people of Chicago without truly helping the people this is intended to help.”

Calls for Regulatory Relief

Andrew Nelms, director of the Illinois chapter of Americans for Prosperity, says it’s no secret how to help people help themselves.

“Nothing helps lift someone out of poverty more than a job, and the job climate of Chicago is so difficult at the moment,” Nelms said. “This, on top of all of the regulations for new business developments, really keeps those aspiring to improve their socioeconomic status at a disadvantage.”

Davies says regulatory reform and restraining the growth of big government are the tried and true ways to fight poverty.

“Placing regulations on one man’s food truck in order to protect brick-and-mortar restaurants is not a role of the government,” Davies said. “When you lift regulations that are keeping people down in terms of their economic growth, they will find a way to naturally lift themselves out of poverty without governmental interference.”

Diagnosis: Too Much Government

Nelms says intervention and interference by lawmakers often cause societal problems instead of solving them.

“A good general starting point for Chicago, and for America as a whole, is when we see a problem—poverty—our first reaction shouldn’t be, ‘What can the government do to fix it?’ and instead ask, ‘What is the government doing to perpetuate this problem?’” Nelms said. “Government should be the last resort, not the first.”

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