The largest universal basic income experiment in the United States: Chicago pays $500 a month to 5,000 households

Chicago on Wednesday approved the nation's largest "universal basic income" pilot program to date, which will pay $500 a month to 5,000 low-income families for a year.

Participants in the program will be randomly selected, but must meet criteria for a household with an annual income of less than $35,000.

As part of Chicago's 2022 municipal budget, nearly $32 million will be appropriated for the project. The required funding comes from the $2 billion in COVID-19 aid funds allocated to Chicago by the Biden administration through the U.S. aid program.

The pilot project aims to reduce the financial burden on families severely affected by the pandemic. In the first six months of the pandemic, thousands of Chicago residents lost their jobs, and about 18 percent lived below the U.S. federal poverty line.

Chicago City Councilor Gilbert Villegas said the pilot program will monitor participants' use of subsidies for the first six months. Depending on the findings, the municipality may direct the use of subsidies for specific purposes, such as paying for heating or food.

This article originated from the Financial Circle Network