Universal basic income.

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By Harish I. Patel and Ameya Pawar

Harish I. Patel is executive director of Economic Security for Illinois and co-led the Chicago Resilient Families Task Force. Ameya Pawar is a fellow with the Open Society Foundations and the Economic Security Project. He co-chaired the task force and served two terms as alderman of the 47th ward. This originally appeared in the May 5th edition of Crain’s Chicago Business.

Ameya Pawar will be our guest this Friday, May 22nd on a live broadcast of Hitting Left with the Klonsky Brothers. 105.5fm in Chicago and streaming at http://www.lumpenradio.com

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In 2018, we led a City of Chicago taskforce to study the impact of cash transfers to address widening inequality in the city. In our report, we discussed how the deck is stacked against working people, and without strategic government intervention and bold policies, it would only get worse. Many Americans were living check-to-check and only four in ten had $400 in the bank. Working people were living on the edge of disaster.

Then came the COVID-19 pandemic.

To deal with the economic fallout from the pandemic, Congress took action in late-March and passed the CARES Act. The act authorizes trillions in no-strings-attached backstops for the credit markets. Last we checked, there was no outcry from free-market activists about the moral hazard or corporate socialism. A recent study showed that 80% of the benefits of the CARES Act went to millionaires. Even dollars meant for mom and pop businesses disproportionately flowed to large businesses like Shake Shack and Potbelly Sandwich Works. Both promised to return the funds following public outcry. Still, minority and immigrant small business owners were largely left out.

Working people weren’t totally left out in the cold. Congress also cut a one-time $1200 check to most working Americans, a break from the past. Historically, the reticence to give cash directly to people has been a bi-partisan affair, especially when it comes to making people whole after a disaster. The fear: moral hazard and creating dependence on government.

Moral hazard and government dependence didn’t stop the federal government from bailing out banks in 2008 or in early April. In both instances, the rich and powerful people and organizations received a blank check. Working people received the equivalent of a gift card.

We ask that our federal, state, and local leaders strongly consider allocating more cash directly to the people.  People need cash today, tomorrow, and for as long as this crisis lasts.

While the primary beneficiaries of the CARES Act were millionaires, Congress has a second chance to do right by working people. 

 

And we have reason to be optimistic. Just last month, House Speaker Nancy Pelosi told reporters that regular, direct cash payments should be a part of the solution to the economic crises caused by the COVID-19 pandemic. Pelosi’s statement is a major win for those advocating for cash as a solution to poverty. This is a tectonic shift in thinking and narrative, but we need more voices to demand cash as part of the COVID response and recovery from every level of government.

Some members of Congress are proposing a basic income of $2,000 per month for every American, and we strongly support this proposal.

We don’t need any more studies or taskforces to trust people with cash. Our report detailed how cash provides dignity, flexibility, and agency. We can strengthen millions of households with a basic income. If a report isn’t convincing, then look to the results from the Stockton SEED demonstration led by Mayor Michael Tubbs. Or Aisha Nyandoro’s Magnolia Mother’s Trust in Jackson, MS. Tubbs, and Nyandoro have been piloting cash transfer programs in their communities. The results are indisputable. When people have unconditional cash, they pay their bills and take care of their families. Two centuries of myths about the working poor and their deservedness have been busted.  

We are over ten weeks into this economic crisis and economists are predicting prolonged economic contraction with unemployment numbers to surpass 25%. People have to pay their rent and put food on the table. A one-time $1200 check helped, but bills are due again in May. They will be again in June. In July. And beyond. The situation is dire.

We don’t need more bailouts for big oil and hand-outs for banks and hedge funds. We do need a hand-up for the American people.

Pelosi’s comments helped shift the narrative on Guaranteed Minimum Income and cash transfers. Now is the time to move from narrative shifts to policy change. It is time to send every American a regular, cash payment on a monthly basis for as long as this crisis lasts.

One thought on “Universal basic income.

  1. Fred can you ask Mr.Pawar why he endorsed the 2nd most corrupt alderman (Burke being the first),Pat O’Connor ex 40th Ward ald. in 2015&2019?Also did Pawar keep his full time job @U.of C. while he was alderman for 8 years?

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