The pandemic made Chicago’s guaranteed income pilot possible—but at the federal level, the push to solve poverty through government-backed income is nearly a century old.
By J. Patrick Patterson and City Bureau
Art: David Alvarado for City Bureau
Chicago just launched one of the largest guaranteed-income programs in the U.S. But how long have Americans been pushing for government-backed income as a solution to entrenched poverty and inequality?
The push to solve economic inequality and widespread poverty through a government-backed minimum level of income is nearly a century old, starting after the Great Depression. Populist Louisiana senator Huey Long, who blamed capitalism for the country’s widespread poverty at the time, proposed in the 1930s giving every American a minimum income of $2,000. However, Long was assassinated in 1935 and his plan never came to fruition.
That same year, a physician and political advocate in Long Beach, California, named Francis Everett Townsend wanted the federal government to establish a guaranteed income program of $200 a month for retired citizens aged 60 or older. The program garnered popular support, and 8,000 “Townsend clubs” across the country lobbied for his program. While President Franklin D. Roosevelt ultimately dismissed Townsend’s pension plan and Congress rejected it in 1939, Townsend’s ideas influenced the Social Security Act adopted as part of Roosevelt’s New Deal.
The idea of guaranteed income surfaced again during the rise of the Civil Rights Movement and the Black Power era that emerged in the 1960s. Rev. Dr. Martin Luther King, Jr. saw guaranteed income as a path to national justice and equality. In 1966, the Black Panther Party, one of the most active Black political organizations of the era, stated that in an unjust economic system, the federal government owes guaranteed income or guaranteed jobs to its citizens.
Calls for guaranteed income also came from libertarians and conservatives. In 1962, free market capitalist Milton Friedman proposed giving free money to everyone in the form of negative income tax to reduce the bureaucracy of state welfare programs and further enable free markets. In 1969, President Richard Nixon advocated for the elimination of welfare programs and the creation of a "basic federal minimum," or a negative income tax. The amount of assistance would decline as incomes rose. However, his idea never came to fruition due to political opposition in Congress.
President Gerald Ford later brought about the earned income tax credit as part of the Tax Reduction Act of 1975, which was further expanded under President Ronald Reagan. The tax credit, which is still in existence today, is similar to a negative income tax but requires that participants work, because the credit is a fixed percentage of someone’s income. The figure fluctuates based on the number of children listed as dependents and whether people file taxes with a partner.
Where have we seen guaranteed income in the U.S.?
The federal government tested negative income tax programs between 1968 and 1980 in areas including Seattle; Denver; New Jersey; and Gary, Indiana. The results showed the cash grants were overall beneficial — some children attended more school, parents pursued continued education opportunities, and families purchased more nutritious food. Some people, however, worked less and earned less money, a point that opponents of guaranteed income use as evidence that it doesn’t work. Proponents argue that these negative income tax experiments may have under-reported earnings and didn’t fully account for the people who forwent short-term income in order to pursue educational opportunities.
Alaska established the nation’s only large-scale permanent universal basic income (UBI) for nearly all residents, regardless of age, in 1976. Today, Alaskans typically receive about $1,000 to $2,000 annually as a dividend of oil revenues through the Alaska Permanent Fund. Since 1997, the Eastern Band of Cherokees’ casino dividend program has provided around $4,000 per person per year in North Carolina from casino profits.
Outside of Alaska, there have been no guaranteed income programs implemented at the state level and there’s no federal program on the horizon, so counties and municipalities are experimenting with pilot programs.
Stockton, California, offered one of the first city-led cash assistance programs to its residents. In 2020, Michael D. Tubbs, who was then mayor, helped found Mayors for a Guaranteed Income, a coalition of dozens of current and former mayors from across the country advocating for guaranteed income policy. Starting in 2018, the Magnolia Mother’s Trust provided 20 Black mothers experiencing extreme poverty $1,000 a month in Jackson, Mississippi. The program has since served more than 300 moms. Last year, Equity and Transformation, a West Side nonprofit in Chicago, launched an 18-month cash assistance program for 30 people who have been incarcerated.
As of this summer, at least 30 cities have launched guaranteed-income pilots, including Chicago. Separately, Cook County joined the list of counties with programs. The county’s application will launch in September, and the first payment will go out in December.
What’s the history of guaranteed income in Chicago?
The modern-day push for guaranteed income in Chicago can be traced back to former alder Ameya Pawar, who in June 2018 introduced a resolution to create a task force to study how Chicago could implement a universal basic income pilot. He wanted to expand and modernize the Earned Income Tax Credit, create a task force to study a guaranteed income pilot program, and eventually give 1,000 families $500 a month as part of a pilot program.
Most alders supported Pawar’s resolution, and in September of that year Mayor Rahm Emanuel announced the creation of the task force, rendering a vote on the legislation moot. Pawar said that years of advocacy built the political will necessary for it to happen.
In February 2019, the Chicago Resilient Families Task Force released a report recommending the city create a pilot for 1,000 Chicagoans to receive $1,000 a month to reduce poverty and increase well-being among the city’s lowest income residents. It was a positive sign since candidate Lori Lightfoot, who would start her term as mayor in May that year, supported the idea.
But in early 2020 at the mayor’s Solutions Toward Ending Poverty Summit, Lightfoot appeared to reverse her position, raising concerns about whether universal basic income was sustainable.
“I’m teaching people to fish so that they can feed themselves for a lifetime,” Lightfoot said at the summit.
Proponents of guaranteed income in Chicago say that the economic impact of the pandemic and the influx of cash assistance programs, such as the city’s Emergency Rental Assistance Program, shifted public opinion and paved the way for the pilot.
In 2021, Alders Gilbert Villegas, Maria Hadden and Sophia King called for the creation of a guaranteed income pilot program to aid 5,000 families with $500 per month. Villegas wanted the city to use some of its $1.9 billion in federal COVID relief funds to fund the project, estimating that the program would cost the city some $30 million per year. In the end, Mayor Lori Lightfoot championed the one-time pilot during the 2022 budget cycle using $31.5 million in temporary federal grants to fund it.
Asked why the Mayor changed her mind, again, her office didn’t directly answer. A spokesperson said the mayor understands that flexible cash assistance is a powerful tool to alleviate financial hardship and combat poverty. And he added that the federal dollars offered an opportunity to create the pilot program and “put hard-hit residents at the center of our economic recovery from the pandemic.”
Sky Patterson is a 2022 Summer Civic Reporting Fellow, along with Francisco Saúl Ramírez Pinedo, who contributed to this report. Sarah Conway, City Bureau’s senior reporter covering jobs and the economy of survival in Chicago, also contributed. You can reach her with tips at sarah@citybureau.org.
Correction: An earlier version of this story misspelled Francis E. Townsend’s first name as Frances. Also, the Magnolia Mother's Trust program has run several cohorts, serving a total of more than 300 women. An earlier version of the story didn't include figures from the most recent cohorts. The story has been updated.
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