{B} uoyed by billions in federal stimulus, the city of Chicago elected in 2021 to run a multi-year guaranteed-income program, called the “Chicago Resilient Communities Pilot,” giving $500 a month to 5,000 families living 250 percent under the federal poverty line. Not to be outdone, Cook County used federal pandemic aid to run its own two-year “Promise Program” giving $500 cash to 3,250 impoverished residents each month.
Now that the programs are ending, what do the governments have to show for it? Over $72.5 million spent. A huge potential city-budget shortfall next year. And, at 17 percent, a city poverty rate far exceeding the national average — higher than both San Francisco’s and Los Angeles’s.
Chicago city leaders have for too long prioritized pet projects such as the guaranteed-income pilot program over addressing the root causes of poverty. This is why Chicago’s efforts to end poverty have failed.
About 60 years after President Lyndon Johnson’s declaration of the War on Poverty, the poverty rate in Chicago is actually higher than it was in 1964. Today, over 450,000 Chicagoans live in poverty on less than $37 a day, and of those, nearly 240,000 live in deep poverty, surviving on less than $19 a day. Bad policy decisions have helped create this sad state of affairs.
The only way we can help those in need is by changing strategy. Fortunately, there are intuitive, durable solutions worth exploring: work, education, and housing.
According to the data, by far the best way to escape poverty is through work. Chicagoans who work full-time, year-round, have a poverty rate of only 2.3 percent. By contrast, those who work part-time or for only part of the year have a poverty rate of 20.7 percent. And those who don’t work at all have a poverty rate of 31.3 percent.
Chicago needs to reward work, not discourage it.
The problem is many federal– and state-government policies disincentivize work. Welfare programs are often structured so a raise at someone’s job will cause a decrease in total income because the individual will lose one or more government welfare benefits. This is called the “benefits cliff,” and Chicago and Illinois need to reform their policies so that people don’t fall off of it into a cycle of dependency.
Then, there’s the issue of Chicago’s poor economy forcing employers to leave so that good paying jobs are harder to find. Walmart, the largest U.S.-based employer, closed four stores primarily on the poor South and West sides earlier this year, citing low profitability. Record crime and burglary rates and high taxes make it easy to see why it’s hard for even large corporate businesses to operate here.
Instead of working to lower taxes and improve hiring, Chicago mayor Brandon Johnson placed a real-estate-transfer-tax hike — a tax hike on businesses — onto the March city ballot this fall. He also approved costly anti-business measures eliminating the subminimum wage for restaurant servers and expanding mandatory paid sick leave. Instead of working to fight crime, he cut about 800 vacant police positions, leaving communities with fewer safety resources and a diminished law-enforcement presence.
Those who suffer most from these policy decisions are those who also desperately need safe streets and good jobs. Chicago’s black population, which resides predominantly on the South and West sides, has a 28.7 percent poverty rate, higher than any other demographic and higher than the national average for black populations.
Other government programs create barriers to work. When compared to the rest of the Midwest, Illinois has more widespread and more burdensome occupational-licensing requirements than other states, according to The Institute for Justice. These excessive regulations cover skilled jobs such as makeup artists, pharmacy technicians, security-alarm installers, and casino workers, preventing Chicagoans from getting started on earning a decent living. Leaders need to remove these and other barriers so Chicagoans can get out of poverty.
Education provides another possible pathway out of poverty.
Of the over 266,000 Chicagoans age 25 or older living in poverty, the majority either didn’t complete high school (65,785, or 25 percent) or received only a high-school diploma (83,490, or 31 percent). Chronically low test scores provide at least a partial explanation for why those earning a high-school diploma still suffer through poverty: Their degrees don’t provide the value they need. Among Chicago Public Schools eleventh-graders who are black, only 10.7 percent meet or exceed standards in reading, and only 7.7 percent meet or exceed standards in math. Among low-income students, only 14.4 percent of eleventh graders are proficient in reading and only 12.2 percent are proficient in math. That’s not a recipe for eradicating poverty.
The situation is especially dire when considering that the most vulnerable Chicagoans in poverty are children. More than one in four children — 26 percent — are impoverished, which is significantly higher than the U.S. city average and far higher than any other age group. Without changes, Chicago’s future is in peril.
What Chicago needs is an educational system that prepares students to thrive in the workplace.
One part of the solution is ensuring educational excellence, which requires accountability and school choice. CPS has recently headed in the opposite direction with social promotion and grade inflation destroying achievement and accountability in schools. Chicago Teachers Union leadership has pressed for more soft scoring and assessment and less “high stakes testing.”
The other part of the solution is reorienting the system around helping students enter careers through programs such as apprenticeships rather than our current, broken “college is best” approach. Already, about half of CPS graduates can’t finish college in under six years.
The last reform for city leaders to explore is how to best help those in poverty access affordable housing. A Harris Poll from December 2022 revealed that 78 percent of Chicagoans agree that the city lacks sufficient affordable housing. Happily, there’s a bipartisan consensus that zoning reform is foundational to achieving this. Chicago needs to reform its zoning and land-use laws to facilitate more housing development. This will require Chicago to discard its “inclusionary housing” policy.
There’s simply no place for poverty in a nation as rich as ours and a city as fine and diverse as Chicago. We have a moral obligation to empower the poor and disadvantaged, and we know that what we’ve been doing for over half a century has hurt, not helped.
With the new year almost upon us, it’s time for city leaders to put pet projects aside and focus on how to help people unleash their full potential. All Chicagoans deserve access to quality education, meaningful work, and affordable housing, and ensuring that they get it is vital to the city’s future.