What happens when residents receive $500 cash, no strings attached?
Cook County, Illinois, home to Chicago and five million residents, has made its guaranteed basic income (GBI) program permanent after officials unanimously approved $7.5 million for the welfare initiative.
The county’s GBI pilot program was supposed to test whether unconditional payments could help struggling residents “live healthier, more stable lives.” Local officials say the experiment in wealth redistribution was a resounding success, but critics argue the program delivered laziness in the form of taxpayer-funded cash.
Income for Nothing
Cook County launched its controversial guaranteed income pilot program in late 2022, providing 3,250 “low-to-moderate income families” $500 cash every month. Over 230,000 people applied to take part in the Cook County Promise Guaranteed Income Pilot before participants were selected through a lottery. Payments started in December that year and ran until December 2024.
Questionnaires sent to all participants revealed the program had “significant positive impacts” on their lives: 75% said they felt more financially secure, 94% used the unconditional funds to manage emergency or unexpected expenses, 56% said they were less stressed, and 70% reported the funding positively impacted their mental health.
According to Cook County, participants said they used the money for food, rent, utilities, and transportation.
It’s not exactly a surprise that participants approved of the program – who wouldn’t enjoy an extra $500 every month, no strings attached?
But those self-reported outcomes only paint half the picture. Josh Bandoch, head of policy for the Illinois Policy Institute (IPI), warned Fox News Digital that the program resulted in “decreased workforce participation and lower individual income (before transfers).”
“That should alarm anyone who wants real, long-term progress for low-income residents,” Bandoch said.
The Cook County Board of Commissioners pushed back on IPI’s assessment, arguing that “outcomes and impacts vary depending heavily on program design: amount of cash, frequency/duration of payments, eligibility criteria (income-based, place-based, etc.), and local cost of living.”
The commission said the permanent program will be designed with “short- and long-term outcomes” in mind.
Perpetual Poverty
The reality is this: Guaranteed basic income recipients usually end up worse off financially than they were before being given unconditional cash.
A National Bureau of Economic Research study of 3,000 guaranteed basic income recipients in Illinois and Texas found the beneficiaries – and their partners – worked less. If you thought the recipients used that extra time off to continue their education or build a new career, think again: The study found the time was spent on leisure, not productivity.
To make matters worse, recipients of guaranteed basic income also spend more money overall, the study determined.
Even participants’ mental health boost was only temporary: Researchers found that happiness and well-being improved during the first year, but then went back to normal afterward.
Footing the Bill
The money for guaranteed basic income must come from somewhere, and that somewhere is the taxpayer’s wallet. Cook County’s GBI pilot program was financed with $42 million in federal funding provided by the American Rescue Plan Act, a $1.9 trillion COVID-19 relief package signed into law by former President Joe Biden in March 2021.
You read that right: Federal funds were used to give thousands of Cook County residents unconditional cash. Add that to Sen. Rand Paul’s list of ‘Festivus’ grievances.
And what did taxpayers get in return? A lottery that incentivizes laziness. GBI recipients routinely work less and spend more. If paying people not to work is the future, what motivation remains for anyone to work at all?
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