Story at a glance
- The U.S. Census Bureau found that in 2020, the country’s poverty rate was 11.4 percent, the first increase after five consecutive years of decline.
- Los Angeles will send $1,000 checks to 3,000 city residents.
- Chicago will send $500 checks to 5,000 city residents.
To help address poverty, only worsened by the coronavirus pandemic, Los Angeles and Chicago are rolling out guaranteed income programs that will send no-strings attached checks to needy families.
The U.S. Census Bureau said the country’s official poverty rate in 2020 was 11.4 percent, that’s up one percentage point from 2019 and marks the first increase in poverty in the U.S. after five consecutive annual declines. That equates to about 37.2 million Americans in poverty and 3.3 million more than there were in 2019.
However, the federal government’s stimulus checks, sent out as COVID-19 relief under both the Trump and Biden administrations, were found to have helped the national poverty rate. According to the Census Bureau, 11.7 million individuals were lifted out of poverty as a direct result of economic stimulus payments.
Those statistics lend to the idea that sending direct payments to individuals and families could have consequential benefits for hundreds of thousands of Americans.
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Los Angeles and Chicago are now the two largest U.S. cities to attempt to tackle poverty in their respective cities by rolling out guaranteed income programs to begin in 2022. They’re temporary, one-year pilot programs that will send direct checks to low-income families.
In Chicago, that will be $500 checks sent to 5,000 needy families while in Los Angeles, $1,000 checks will be sent to 3,000 individuals.
In Los Angeles, BIG:LEAP, the name of the city’s economic assistance pilot program, cites that poverty affects two out of every 10 residents in the city of Los Angeles and 31 percent of which are children.
In Chicago, the Census Bureau estimated that persons considered in poverty rose by 18 percent from 2010 to 2019, despite the city experiencing a slight decline in its overall population.
However, Chicago and Los Angeles are not the first cities to experiment with guaranteed income initiatives. About 40 other cities have considered or implemented similar programs, according to the Mayors for a Guaranteed Income. The group has gathered support from 57 mayors across different U.S. cities to advance financial stability and opportunity for all Americans.
Stockton, Calif. implemented the country’s first mayor-led guaranteed income initiative in February 2019, called the Stockton Economic Empowerment Demonstration (SEED). The program gave 125 Stocktonians $500 per month for two years. In March 2021, researchers released preliminary findings of SEED and found that unconditional cash payments enabled recipients to find full-time employment and showed healthier versions of themselves, with less depression and anxiety.
“Guaranteed income offers the best hope to provide people with resources to make important life choices that everyone wants the ability to make- where to live, how to invest in a better future through education, or starting a business, and how to best support children,” said Jeremy Rosen, director of economic justice at the Shriver Poverty Law Center, in an analysis of guaranteed income.
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