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The Champaign County Guaranteed Income Project could provide a path to alleviating poverty

A University of Illinois Urbana-Champaign research team will be micro-piloting a guaranteed basic income program for ten local families with school-aged children called the Champaign County Guaranteed Income Project. The team is led by Christopher Larrison, an associate professor of social work at the U of I, and Kim Nix, the overseer of homeless services in Champaign and Ford counties. Their goal is to determine whether giving “no-strings-attached” cash to families will decrease the number of students experiencing sheltered homelessness in the county.

Federal law defines homeless people as “individuals who lack a fixed, regular and adequate nighttime residence.” Larrison and Nix add that this definition of homelessness includes “families who are couch surfing, living out of cars or hotel rooms or don’t have a place in the parent or guardian’s name.” The project concludes in July 2023.

From this no-strings-attached program, the team hopes to learn how the families would interact with an extra $750 a month. Working with these families and individuals in such dire straits, Nix imagines that an additional $750 could go toward helping the families she aids with their rent, groceries, furniture, clothing, medications — the list goes on.

In this sense, the Champaign County Guaranteed Income Project is akin to Universal Basic Income (UBI), the idea that the government provides a monthly stipend to all citizens. Those who oppose UBI often argue that, upon receipt of this cash, these people would stop working or contributing to the economy. It posits that recipients wouldn’t get anything done, that homeless people are lazy and, when given help, poor people will be free-loading and mooch off of the government their entire lives. Psychology has a term for this simplified way of thinking: it’s called the just-world hypothesis/phenomenon.

For quick context, the American Psychological Association defines the fallacy of the just-world phenomenon as “the tendency to believe that the world is just and that people get what they deserve.” That is not true. 

The American just-world phenomenon is illusory because it ignores institutionalized oppression. This dream promotes a focus on individual responsibility wherein if someone works hard, follows social and moral rules, and takes personal responsibility, they’ll be financially successful. Until the government fixes the holes in these pillars of society, UBI has become necessary. 

Studies have demonstrated time and time again that people don’t inherently want to do nothing. A highly comprehensive review by Iona Marinescu covering the empirical results from U.S. and Canadian negative income tax experiments, the Alaska Permanent Fund Dividend, and the Eastern Band of Cherokees casino dividend program, as well as a few other assorted basic income studies, found that:

“Many [of these] studies find no statistically significant effect of an unconditional cash transfer on the probability of working. In the studies that do find an effect on labor supply, the effect is small. [That is,] a 10% income increase induced by an unconditional cash transfer decreases labor supply by about 1%.”

The Marinescu project found that unconditional cash transfers can have different effects depending on their program design. Most do not impact labor participation but can improve other quality-of-life indicators such as mental and physical health, education outcomes, parenting, and reduced criminal activity.

Our hope with the Champaign County Guaranteed Income Project is that it results in success stories and potential paths toward alleviating poverty in Champaign County. Champaign-Urbana is more affordable than other parts of the country, but the minimum wage is still not enough. The 2018 government census estimated the poverty rate in Champaign County to be 21.4%. In the city of Champaign, that number is 26%. That means that of the 77,991 Champaign residents, 20,968 live in poverty. There are more than 500 families in Champaign County who experience sheltered homelessness. This situation is unacceptable.

This pilot program led by Larrison and his team is not necessarily a pilot for UBI but rather an aid or supplement for families that need it. Will it make a big difference in the lives of those who get the support? We certainly hope so. This project does not work to address systemic oppression in healthcare, housing, and education, but perhaps it will illuminate a possible first step in addressing the basic needs of these families 

This is a micro-pilot program, so funding is not guaranteed beyond the end of the project next summer. Will there be enough positive results to make it easier to find other funding sources to expand the program? Will the cities of Champaign and Urbana be willing and able to offer an annual budget line for something like this? Or is that municipal funding better spent making actual changes to the systems that exacerbate poverty and homelessness? We hope that the Champaign County Guaranteed Income Project will offer support to the ten families in the study, and look forward to final reports next summer. 

The Editorial Board is Jessica Hammie, Julie McClure, Trude Namara, Patrick Singer, and Mara Thacker. 

Top image from Shutterstock. 

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