Recently, municipal council member Ameya Pawarin Chicago proposed a new legislation that would provide 1,00 families with a Universal Basic Income (UBI) of $500 monthly to be used however they wish. Pawar stated,
Nerly 70% of Americans don’t have $1,000 in the bank for an emergency. UBI could be an incredible benefit for people who are working and are having a tough time making ends meet or putting food on the table at the end of the month.
The bill that Pawar is proposing also impacts the Earned Income Tax Credit program. The bill would allow families to put their tax credit towards their monthly mortgage payments.
Chicago might be the largest city interested in the UBI program but other cities throughout the country such as Stockton, California have also proposed a UBI program. In Stockton, 100 lucky residents starting in 2019 will receive the $500 a month. The program lasts for 18 months before officials determine whether to give the benefits to all residents.
Alaska also issues residents checks every month since 1976 as part of the Alaska Permanent Fund. The amount varies as it is calculated based on oil revenue, however, last year the average check was $1,100. In other places, their UBI programs were not successful such as Finland. Finland just recently ended a program that was providing unemployed citizens with 560 Euros a month.
Many tech moguls think that UBI is the way of the future especially as the technology for artificial intelligent begins to grow ultimately replacing human jobs. A 2017 Pew Research Center study concluded that 60% of Americans are in favor of the government providing a minimum income to ensure that families are guaranteed to meet their basic needs.
Whether or not $500 a month will really make an impact in these families lives is hard to determine. Without financial literacy available, many people who come from low-income families might not know how to smartly save or invest their money to ensure that it lasts longer than just the month. If Pawar expects people to save their money for emergencies rather than splurging on brand name products at the grocery store, this UBI program could be a failure.