Chicago is a thriving, world-class city—and yet, too many of our residents are struggling every day to make ends meet.
Despite working and tight budgeting, Chicagoans are making impossible financial choices: feeding their families or keeping up with utility bills; paying for transportation costs or living in a safe, affordable neighborhood; finding dependable child care or filling prescriptions. And if you are able to set aside a small amount of money after meeting your basic needs, your savings can easily be wiped out by an unforeseen emergency.
Nearly half—44%—of households in Chicago do not have a basic safety net to weather emergencies or prepare for future needs. This ranges from 25% of white households, to 61% of Latino and Black households.
The high rate of liquid asset poverty means Chicago is home to many people who cannot cover basic expenses for three months if they experience a sudden drop in wages or hours, job loss, a medical emergency or another financial crisis leading to a loss of stable income. Living under these circumstances is not only dehumanizing, but also a vicious cycle where the math continually doesn’t add up.
The multi-layered factors contributing to economic insecurity include:
- The growing income disparity
- Entrenched racial and gender inequity
- An inadequate, ill-equipped government safety net
- Wage stagnation
- The rise in contingent work
- The future of work due to automation
For the last six months, the Chicago Resilient Families Task Force brought residents, researchers, practitioners, public sector partners and philanthropy to ask what might be done to increase economic stability and resiliency in Chicago. I am grateful to be part of these important conversations given that the observations, the recommendations and call to action align with The Chicago Community Trust’s focused strategic goal in closing the racial wealth gap.
Chicago is home to many people who cannot cover basic expenses for three months if they experience a sudden drop in wages or hours, job loss, a medical emergency or another financial crisis. Living under these circumstances is not only dehumanizing, but also a vicious cycle where the math continually doesn’t add up.
The Chicago Resilient Families Task Force recently released the report Big Shoulders, Bold Solutions: Economic Security for Chicagoans, summarizing a collective journey of learning, listening and imagining:
- We learned from data and research on economic insecurity both nationally and locally
- We listened to Chicago’s residents about poverty’s vicious cycle and civic leaders like Michael Tubbs, Mayor of Stockton, California, who is testing a universal basic income pilot program as a way to move his city forward
- We imagined bold policies and innovative programs to support a more equitable Chicago
The report lays out a potential roadmap to addressing the systemic economic instability that too many of our neighbors face:
1. Expand and modernize the Earned Income Tax Credit (EITC) through the tax code. A bold city and state EITC would provide more reliable support to more people. The state has an EITC to build on and there are opportunities for the city to explore creation of a city EITC. We can bring more workers into the fold, particularly unpaid caregivers as well as include people with middle class incomes and students; increase the minimum credit for most recipients to give a more substantive benefit; and spread out the payments over the year in order for income to be more predictable.
2. Test a guaranteed income pilot. A pilot program will help us learn how the public sector can efficiently operate and bring effective programs like this to scale. A pilot would reach 1,000 Chicagoans with $1,000 a month. Guaranteed income has the potential to effectuate powerful change—significant reductions in poverty, ability to cover an unexpected emergency and improvements in overall health and well-being.
3. Advocate for policies that go beyond cash transfers. The State of Illinois and City of Chicago can take complementary actions to increase work stability and economic security, strengthen the safety net, bolster consumer protections and increase economic mobility.
Again and again, I heard first-hand stories of the widening gap between the haves and the have-nots. Economic security is not a question about who is deserving or undeserving. Despite where you were born, where you live, what job title you hold—everyone should have the opportunity to thrive and live with dignity. Government must lead in making income more predictable and financial well-being less precarious for all Chicagoans.
Our city has a great opportunity to collectively tackle complex problems with bold, innovative solutions. I hope we take it and continue to learn, listen and imagine—resulting in a more equitable Chicago.
Read and download the Task Force’s complete report