Chicago's Guaranteed Income Guarantees Less Opportunity
Authored by Josh Bandoch via RealClearPolitics,
There have been more than 150 guaranteed income pilot programs implemented across the country, but only one has made its program permanent – Cook County, Illinois.
The county, which includes Chicago, became the first place in America to commit to a taxpayer-funded program indefinitely, serving as the nucleus for expanding the scope of these programs nationally. Taxpayers and recipients beware.
A guaranteed income program is simple: Give low-income people a monthly amount of money to use as they see fit. These payments are in addition to other welfare benefits they receive, and don’t come with any requirements to work, to learn better money management, or to get job training.
The idea is to promote equity and help the poor and disadvantaged, a noble goal, but in practice it can harm families by reducing work, income, and opportunity.
They’re extremely expensive, too, and threaten to wreck the finances of any city or state that implements them with ever-higher taxes.
Cook County used $42 million in funds from the American Rescue Plan to run a two-year pilot program that provided 3,250 low- to moderate-income participants with $500 per month.
The results? One firm committed to “equitable economic development” found four apparent benefits.
Their modeling estimated that households directly spent 55.8% of the money received. The $42 million investment generated only $8.3 million annually for local businesses and a $5.4 million increase in annual economic output in Cook County. Generating $286,000 in tax revenue, $44,000 of which stayed in Cook County.
One concern with these findings is that no results from a control group were reported. There’s no way of knowing if the increases were a result of these 3,250 recipients or if it was simply a post-pandemic boon.
The county is continuing the program in 2026 at a cost of $7.5 million to local taxpayers.
Another study of a more rigorous Chicago-area pilot program with a control group found that the program discouraged participants from working and reduced their earned income.
Taking part in the pilot actually lowered participants’ earned income by $1800, excluding program payments. Recipients’ workforce participation dropped by 3.9 percentage points.
Participants and, surprisingly, others in the recipient’s household, ended up reducing their hours worked per week. Children who grow up around full-time working adults are more likely to climb the economic ladder, so this reduction in work threatens the future of participants’ children.
Still, the appetite for guaranteed income programs is rapidly expanding in Illinois and nationally. Illinois allocated $827,272 in its 2026 budget to fund a pilot.
In October, Rep. Bonnie Watson Coleman (D-NJ) reintroduced the Guaranteed Income Pilot Act, with the stated goal of lifting people out of poverty. The federal program would select 20,000 participants.
Of them, 10,000 would receive “a cash payment each month equal to the fair market rent for a 2-bedroom home in the ZIP Code in which the eligible individual resides, or a substantially similar amount.” In Chicago, the payment would increase to $2,670 per month. In New York, it’d be $2910. A control group would contain 10,000 people.
A final report on the program would explicitly be required to study the feasibility of expanding the program. The goal of these programs – sometimes explicitly stated – is to cover more people.
The federal government spends $1.2 trillion on welfare programs. Despite all that spending, the federal poverty rate has stubbornly hovered between 11% and 15% for decades.
Providing no-strings cash payments won’t solve poverty, and it won’t ensure recipients can gain the skills and experiences necessary to climb the economic ladder.
The best way to help low-income Americans is to expand opportunity. This starts by removing systemic barriers the government has created that disincentivize work.
America’s welfare system makes it economically rational and psychologically understandable for poor people to reject opportunities due to “benefits cliffs.” Increases in income through raises and promotions can cause recipients to lose more in welfare benefits than they gain in higher earnings.
To solve these cliffs, federal lawmakers should consolidate programs to reduce redundancy, standardize benefit reductions across programs, and streamline benefit delivery systems.
State and local elected officials should focus on empowering people through work rather than disincentivizing it. The best way to do this is to adopt a career-first education system that’ll ensure people have the skills they need to work and cast aside the broken degree-first model.
With guaranteed income programs gaining traction, we need to instead embrace the reality that the only proven way to guarantee more income and opportunity and help low-income Americans is work.
Tyler Durden
Tue, 12/23/2025 – 14:00