Chicago is set to launch a big guaranteed income pilot

In February 2020, before COVID-19 arrived in full force in the U.S., Chicago Mayor Lori Lightfoot gathered politicians, academics, and ordinary Chicagoans to an anti-poverty summit called Solutions Toward Ending Poverty, or STEP, to kick off a mayoral agenda dedicated to finding concrete solutions to “entrenched generational poverty,” Lightfoot says. While many bought into the discourse, critics balked. “Some people looked at me like I had two heads,” she says. “Why is she even talking about these things?”

Then, the pandemic hit, decimating jobs and incomes, and throwing even more people into poverty. Cities across America rushed to implement safety nets, including a slew of guaranteed income pilots. Aggressively battling poverty had become mainstream.

This week, on the STEP summit’s two-year anniversary, the mayor’s office is announcing its own year-long guaranteed income pilot, which will grant cash assistance to 5,000 residents of Chicago, one of the biggest U.S. cities so far to roll out such a pilot. It’ll form a small but significant part of the anti-poverty agenda that the mayor’s office has consolidated since the summit, ranging from rental assistance to utility bill forgiveness.

Guaranteed income pilots from Oakland to Pittsburgh have kicked off this year, but along with Los Angeles’s, announced in 2021, Chicago’s will be one of the biggest. The Chicago Resilient Communities Pilot will send 5,000 randomly selected adult recipients $500 per month for one year, to spend as they see fit. Participants must have an income level at or below 250% of the federal poverty guideline—currently $32,200 for an individual—and must have suffered economic or medical hardship related to COVID-19, such as job loss, reduction of income, or inability to work due to an underlying condition that makes them more susceptible to the virus.

The administration originally announced the pilot in November 2021, when the city council passed it and placed a $31.5 million budget behind it. But it received some criticism, including from the council’s Black caucus, which said it would rather direct the funds into reparations programs. “Look, it’s Chicago,” Lightfoot says. “So, everybody has an opinion about something.” But she says they worked through problem areas, and that the newly announced eligibility criteria has pleased a lot of people, in that the cash transfers won’t be confined to certain neighborhoods or races, but targeted to the poorest across the city.

Lightfoot stresses that poverty prevention needs to be holistic, especially in a city where one in five residents lived in poverty, and one in 10 in extreme poverty, even before the pandemic. “You’ve got to teach people to fish,” she says of longer-term investments and support to help people succeed. But, she also feels that this extra cushion of money is critical to help people survive the immediate pain of the pandemic. “I grew up in one of these families that lived paycheck to paycheck,” she says. “If we’d had an extra $500 a month, that would have been like gold for us.”

The cash assistance pilot, for which applications will launch in April, is part of the mayor’s larger anti-poverty program, funded within an overall $16.7 billion recovery budget approved for 2022. Last year, the city included funds for rental assistance, affordable housing investments, and small business investments, particularly in the poorer South and West sides, as well as enforcement of worker protections. Chicago also raised the minimum wage to $15 an hour.

Particularly important to breaking the cycle of poverty, Lightfoot says, is relieving mounting debt, such as the case of residents who end up filing for bankruptcy after accruing city fines and fees. One fee that’s been a particular target is Chicago’s vehicle tax, known as the city sticker fee. The administration has forgiven $11.5 million for city sticker debt, reduced vehicle impoundments, and stopped debt-based license suspensions. Similarly, it’s so far forgiven $9 million in utility bill repayments so far, for 18,000 households.

With respect to designing future anti-poverty policies, Lightfoot says the results of the guaranteed income pilot should be informative. While the mayor says she spoke to a lot of mayors across the country running similar pilots, including those under Mayors For a Guaranteed Income, she is not one of the approximately 60 mayors in that coalition. But, like in those pilots, Chicago is teaming up with an academic partner, the University of Chicago’s Inclusive Economy Lab, to glean data on what participants spent the cash on, and discover whether those choices should guide future decisions on social services spending.

In the long term, the mayor says she wants her city’s anti-poverty agenda to fully eliminate the systems that keep people in poverty. “My goal is: long after anybody remembers that Lori Lightfoot was mayor, that we built an infrastructure that cannot be undone,” she says. And, to raise expectations for future city governments—”so high, that no future mayor would ever dare retrench.”