Universal Basic Income experiment would give low-income families cash for free

CHICAGO — As technology and automation reshape the economy, potentially forcing millions out of work, a once-radical idea is gaining traction: Universal Basic Income.

Backed by a majority of Chicago aldermen, progressive Ald. Amaya Pawar wants to bring a study of the idea to Chicago, and give 1,000 Chicagoans $500 dollars a month — no strings attached. If he succeeds, Chicago would be the largest U.S. city to try it out.

Pawar points to over two million people currently working in jobs tied to trucking, including supply chain and logistics, as workers that are vulnerable to the economy of the future. As companies replace workers making middle-class wages with robots, they're already working on driverless trucks. Those truckers losing their jobs would also have ripple effects elsewhere in the economy, he said.

"...you go down the scale with motels, the restaurants, there’s massive changes," Pawar said. "It’s time to have a conversation on automation around income inequality and how we are going to prepare for the future."

Pawar said any comparisons with welfare reform are based on a "really ugly narrative." It's also not a strictly left-leading  idea — Richard Nixon considered a minimum income for the poor.

"This is where we are today in America: fighting over scraps. Poor white people are pit against poor black and brown people and all poor people are fighting each other at the bottom and nothing at the top as changes," Pawar said.

So far Pawar says 37 Chicago aldermen have signed on to his proposal and he’s working behind the scenes to move Mayor Emanuel. Pawar thinks he can win the mayor’s support because his proposal calls for changes to the Earned Income Tax Credit program.

"He’s not willing to sign off on it just yet. But I will say this: he had been leading the modernization of the Earned Income Tax Credit when he was in Congress," Pawar said.

So who pays for the cash handout? Pawar says the city does not have the money for it, so he hopes philanthropists foot the bill. Then researchers would study the social and economic impact of handing out the money.

In a future where robots replace workers, proponents say people will need additional income. This week, even former President Obama endorsed taking a hard look at universal basic income.

"We’re going to have to consider new ways to think about these problems," Obama said, citing a universal income as one "new way" of thinking.

Alaska already has a similar program in place, and Stockton, CA is looking to try this next year.