On October 28, the Chicago City Council passed the nation’s largest universal basic income (UBI) pilot program.
Beginning in 2022, the city will send $500 per month to 5,000 randomly selected low-income households, no strings attached. The only prerequisite is that each family must earn less than $35,000 per year.
Mayor Lori Lightfoot, a strong advocate for UBI, has said, “Growing up, I knew what it felt like to live check to check. When you’re in need, every bit of income helps.”
Yet, not all members of the Chicago City Council agree with Lightfoot. For instance, Alderman Nick Sposato recently described Lightfoot’s UBI pilot program as “a socialist idea that doesn’t consider the mainstream.”
Moreover, the Chicago Aldermanic Black Caucus (CABC) has said the funds for the city’s UBI pilot program ($32 million in 2022) would be better spent on violence prevention.
Sposato and the CABC raise valid points.
The UBI is the embodiment of socialism because it is nothing more than wealth redistribution.
And, considering the crime wave that has engulfed Chicago under Lightfoot’s tenure as mayor, that $32 million would be better allocated beefing up the tattered Chicago Police Department.
Besides UBI’s immense appeal to some Chicagoans, lawmakers should not create another welfare program in a city that is already facing a budget shortfall of $733 million in 2022.
Since the launch of the War on Poverty in 1965, the United States has spent an estimated $22 trillion on anti-poverty programs. And what have Americans received in return? Mountains of red tape, bloated bureaucracies, and deep-rooted cronyism and corruption. Since 1965, the poverty rate has barely changed.
Extensive evidence also exists that shows UBI programs fail to achieve their stated goal of alleviating poverty.
Consider. Finland abandoned its UBI experiment two years ago because it failed to reduce unemployment and placed an economic burden on Finnish taxpayers. In 2015, the Finnish government launched a UBI program that gave 2,000 unemployed Finnish families $658 per month after the unemployment rate reached a 17-year high of 10 percent.
While the UBI was in effect, Finland’s unemployment rate decreased less than 1 percentage point. To this day, it remains the highest among all Nordic countries. Additionally, only 35 percent of hard-working Finns supported the UBI when told they must pay more in taxes to keep the UBI program afloat, according to a study by Kela, The Social Insurance Institution of Finland.
Canada also recently pulled the plug on its three-year UBI pilot program, which lasted less than one year. Under the Canadian UBI program, 4,000 Ontario residents were given a maximum of $16,989 per year for a single person or up to $24,027 per year for a couple. The program’s initial budget was $150 million.
When Ontario’s Minister of Children, Community, and Social Services Lisa MacLeod announced the abrupt end of the UBI program, she noted it was “quite expensive” and “clearly not the answer for Ontario families.” MacLeod also said the UBI program “was certainly not going to be sustainable” and “spending more money on a broken program wasn’t going to help anyone.”
After the UBI was terminated, Canadians were asked what they thought about the program. According to Ipsos, 60 percent of Canadians said a UBI makes people more reliant on the state and discourages employment. Furthermore, 52 percent said a permanent UBI program would increase taxes to unaffordable levels.
Although evidence in favor of UBI programs is lacking, Democratic-run cities are embracing them en masse, just as they have numerous other failing programs, including minimum wage hikes (which kill jobs), rent control (which limits housing access), and a plethora of welfare programs (which destroy families and breed government dependence).
The people of Chicago would be better off if the mayor and city council addressed the serious problems the city is facing: out-of-control crime, failing public schools, exorbitant taxes, a huge budget deficit, looming pension shortfalls, and an economy on life support.
Chris Talgo ([email protected]) is senior editor at The Heartland Institute.
Scroll down to leave a comment and share your thoughts.