Basic Income Opportunity in Chicago

America’s third largest city has a tremendous opportunity to put the notion of basic income to the test.

Chicago Alderman Ameya Pawar proposed paying 1,000 families in his city $500 a month as a test of basic income, The Intercept reported. The money would automatically be paid without any strings attached.

The city would get the $500,000 a month; or $6 million, a year for the program by modifying the Earned Income Tax Credit. The news is exciting because Pawar has reportedly convinced a majority of Chicago city council members and Mayor Rahm Emanuel to go along.

Basic Income needs to be tested

A basic income test in a city like Chicago is a great idea because research into the concept has been limited.

Basically, there has been no serious research into basic income since the 1970s. To make matters worse the two biggest tests undertaken back then produced questionable results.

Data from a basic income test conducted by the Canadian government in Dauphin, Manitoba, in the early 1970s was not analyzed until recently. The data sat gathering dust in government archives until Dr. Evelyn Forget dug it out a few years ago, writer John Hari alleged.

The data Forget analyzed indicated that basic income can improve mental health, Hari wrote in his book Lost Connections. Intriguingly, Forget noted that the rate of hospitalizations for mental problems in Dauphin fell by 8.5% during the basic income test.

Unfortunately, Forget’s conclusions are questionable because they are based on 40 year old data. A major problem is that Dauphin is a remote town far out on the prairie. The number of social scientists willing to travel there for data collection was limited.

The only other comprehensive tests of basic income were done in the United States at the same time. Since that data is  45 years old, its usefulness is questionable.

How Chicago Can Test Basic Income

New data about basic income collected and analyzed by a wide variety of social scientists is needed.

That’s where Chicago comes in; there are dozens of universities in and around the Windy City with hundreds of social scientists and grad students. Educational institutions there include the University of Chicago, one of the most famous economics schools on Earth.

All the experts would need to do study the effects of basic income in Chicago is take a short drive or train ride to poor or working class neighborhoods. It would be hard for proponents; or opponents, to bury the results of the test.

More importantly, we would get data about basic income in modern conditions from a wide variety of experts with many different perspectives. This would give us hard data with which to make informed decisions about basic income.

Decision makers would have something to go on besides gut instinct, common sense, prejudice, and outdated data. Opponents should welcome a Chicago test because it might give them some valid criticisms rather than hyperbole. Basic income advocates should be excited about a chance to put their pet project to the test.

Chicago might provide the data we need to make an informed decision about basic income. Is it a valuable tool for fighting poverty, or an idealistic pipedream? We might have some real answers which are needed now with politicians promoting basic income as a panacea for all of society’s ills.

How about a DARPA for Social Services?

The Chicago and Stockton basic income proposals demonstrate that there is a lot of innovative social work going on in America. All sorts of people are proposing a wide variety of creative solutions for problems like poverty.

Unfortunately, it can be hard for them to get funding. Most charities only fund very traditional efforts such as food banks or shelters. Government agencies have few incentives to change, and strong rationales for suppressing innovation.

Fortunately, there is a proven method for government to encourage innovation in a field. The template is provided by the Defense Advanced Research Projects Agency (DARPA) which tries to create breakthrough technologies and capabilities for the Pentagon.

DARPA acts as a sort of venture capital firm, providing seed money for research and development by universities, private industry, small business, government, agencies, and others. Past successes at DARPA include the internet and the Global Positioning System (GPS).

How A DARPA for Social Services Might Work

A DARPA for social services would fund innovative social programs and related work. The social work DARPA would combine charities, community groups, nonprofits, government agencies, and university researchers.

One of the social-work DARPA’s mandates would be to fund research into alternative poverty-alleviation strategies such as basic income. It would also fund the development of new technologies for benefit delivery.

In her excellent book Automating Inequality: How High-Tech Tools Profile, Police, and Punish the Poor Virginia Eubanks exposes how clunky, ineffective, outdated, and inefficient social services computer technology is. In many cases the technology is so bad it makes the situation worse for the poor.

One reason why this occurs is that companies have little or no incentive to develop better software or hardware for government agencies. Nor is there any incentive to develop specific applications for social services or welfare programs.

Instead, one size fits all solutions are deployed on everybody. To make matters worse, that technology is often administered by understaffed government agencies filled with poorly-trained and underpaid bureaucrats. That tech quickly fails because it was not designed for real-world conditions.

An obvious use of the social work DARPA would be to develop new tools for benefit delivery. Another is to test new social services paradigms like basic income. Such an agency would be presumably located at the Department of Health and Human Services.

America has some tremendous opportunities to take social services technology and work to the next level. Hopefully, the Chicago Basic Income test will be the start of a wave of social services innovation in America.