Chicago mayoral task force recommends $1,000-a-month handout for 'struggling' Chicagoans

A universal basic income has been around as an idea since the 1960s, but few state or local governments in America have actually tried it.  That may change in Chicago as a panel of experts assembled by Mayor Rahm Emanuel is recommending that "struggling" Chicagoans be given $1,000 a month, no strings attached.


The idea is to break the cycle of poverty.  The pilot program would give 1,000 struggling Chicagoans $1,000 a month.

Supporters say people could use the extra cash to cover unexpected emergencies, increase their savings and improve their health.

The money would come from a mix of city funds and charity.

Aside from the obvious moral hazard of just giving people cash for nothing, there are practical difficulties as well.


Just this week, former President Obama, speaking in South Africa, said that a guaranteed income would be one way to shrink the "yawning disparities" in wealth and education.

Do these luminaries know something the rest of us don't?  Sadly, no.  They're just wrong.

There's already an experiment getting under way in deeply troubled Stockton, Calif., once known as the nation's home-foreclosure capital.  Facebook co-founder Chris Hughes kickstarted that city's program with a $1 million donation.  But it will have no more success than other "experiments" with giving money to people not to work.

Why are we so sure?  It's already been tried elsewhere.

Indeed, in April, impeccably progressive Finland decided to end its limited experiment with a UBI that paid 2,000 nonworking people roughly $685 a month.  The idea was that it would free up people to look for work, or be creative.  It didn't happen.

"There is a problem with young people lacking secondary education, and reports of those guys not seeking work," said Heikki Hiilamo, a University of Helskinki professor of social policy.  "There is a fear that with basic income they would just stay home and play computer games."

Far closer to home, as we've noted before, the U.S. has already tested a closely-related idea, the so-called "negative income tax."  Essentially, it's a guaranteed income by another name.  And it failed abysmally.

"In the 1970s, the government ran four random control experiments across six states to try the negative income tax, a similar policy proposal that was popular at the time," wrote Mimi Teixeira in The Daily Signal earlier this year.  "In each text, the work disincentive effect was disastrous.  For every $1,000 in added benefits to a family, there was an average reduction in $660 of wages from work."

That's not all.  The scheme would not get rid of welfare programs.  In fact, it is likely that recipients of a universal basic income would run out of money by the end of the month and still need food stamps and other welfare programs to keep from starving.

A universal basic income ignores human psychology and the reality of poverty.  People are poor for a variety of reasons.  You can point to bad education, broken homes, drugs, gangs, and all the ills that attend hopeless people.

What the poor lack that others have is the life skills necessary to make it on their own.  If you don't know how to dress for a job interview, or what's expected of you if you get a job, you will fail.  If you can't budget to stretch your income to cover necessities like food and rent, you will fail.  Those kinds of basic skills are lacking in poor neighborhoods and regions like Appalachia.  People aren't born with this knowledge — it is learned at the feet of their parents or caregivers.

It might surprise you to learn that in our mobile society, only about 20% of those living below the poverty line are poor all year round.  Most of the "poor" go on and off welfare because they are seasonally employed, or are independently employed in industries that wax and wane with the times.

The hardcore 20% in poverty — the "generational poverty" we're most familiar with — have resisted all efforts at reform.  There is absolutely no reason to believe that the hardcore poor will suddenly find the life skills necessary to make it on their own just because they get no-strings-attached cash from the state. 

It's a seductive idea that ignores the psychology of human beings.  If people get something for nothing, they will give nothing in return.  That would defeat the entire purpose of a universal basic income — an idea that should be permanently shelved.

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