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Can $500 A Month Keep Formerly Incarcerated People From Reoffending? West Side Study Will Test Guaranteed Income

The program is attempting to address the root cause of recidivism by giving formerly incarcerated people the financial stability needed to turn around their lives.

Equity and Transformation team members with Chicago Future Fund participants, who will each receive $500 monthly in a guaranteed basic income program.
Pascal Sabino/Block Club
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WEST GARFIELD PARK — A guaranteed basic income pilot program is giving $500 a month to a cohort of West Siders who share one thing in common: They all were incarcerated.

The program, called the Chicago Future Fund, is one of the first to study how a guaranteed basic income can benefit returning citizens. Thirty formerly incarcerated people will participate in the program over 18 months. The program is looking to see if recidivism can be reduced by addressing the underlying reasons so many people are rearrested shortly after being released from prison.

Most people with a criminal record struggle to find employment and make ends meet long after they’ve served their time, said Richard Wallace, founder of Equity and Transformation, the organization that launched the program.

“There’s been countless background checks on me,” said Wallace, who struggled to find a job after being incarcerated. “It numbs you from the idea of ever getting ahead, ever getting a full-time job. You give up and you get right back into the streets.”

Giving people a basic income will give them the stability they need to turn around their lives and find employment or get a better education, Wallace said.

It is a common misconception that guaranteed income programs discourage people from working, Wallace said. Similar studies on guaranteed income, like the 2019  Stockton Economic Empowerment Demonstration, have found the opposite. Full-time employment rates increased by 12 percent among participants who received the no-strings-attached cash payments, that study showed.

When participants have a baseline income, they are more likely to seek employment, and they are more likely to be equipped with essentials such as housing and transportation to get a job, Wallace said.

“Participants are getting full-time employment because they’re able to pay for things like phone bills. They’re able to pay for bus cards and Ubers and Lyfts to get to job interviews. It removes the material barriers, like for folks that needed child care so they can go to an interview,” he said.

It’s critical for formerly incarcerated people to find financial stability since they often face insurmountable barriers to getting employed. It is financial desperation that drives many to reoffend, trapping them in a cycle of poverty and incarceration, said Rachel Pyon, program manager for the Chicago Future Fund.

“Folks that engage with the informal economy are doing so out of a means of survival. They are forced to sometimes sell drugs, sometimes participate in illegal activities because that is the only way they can survive,” Pyon said.

The program should give participants “some breathing room” that will allow them to “focus instead on the career path they want to do … to go do anything else with their lives,” Pyon said.

The $500 monthly payment is “an opportunity to help you get yourself in order,” said Jeremiah, a recipient who asked that his last name not be used.

Jeremiah intends to open a bank account with some of the money and work to improve his credit, he said. He is interested in someday starting his own business, and the payments will give him the stability to “get to another level,” he said.

“You’re already in preparations of doing things in your own life, on your own time, trying to benefit yourself to get to where you’re trying to go. … It’s basically funding to guide you,” Jeremiah said.

Nearly 40 percent of people who leave prison are arrested and incarcerated within three years of being released, according to recent data from the Illinois Department of Corrections.

Recidivism is expensive, Wallace said. Each incident of recidivism costs Illinois taxpayers about $51,000, according to a 2018 report by the Illinois Sentencing Policy Advisory Council. If guaranteed basic income can prevent people from reoffending and being locked up again, it could save state and local governments much more than the cost of the program, Wallace said.

“It’s actually cheaper and more affordable than incarcerating somebody for a year. One of the major community benefits is there’s more taxpayer dollars to be used for other activities as opposed to incarceration,” Wallace said.

The West Side program will last 18 months, and Equity and Transformation will conduct surveys and interviews with participants to collect quantitative and qualitative data on the impact.

The study is focusing on how a guaranteed income will affect four key metrics: recidivism, mental health, physical health and economic stability.

Previous studies on guaranteed basic income, such as the Stockton Economic Empowerment Demonstration and a similar program in Finland, showed improvements in overall happiness, cognitive abilities, stress levels, physical health, employment rates and income stability. Past studies showed benefits for all metrics being measured by the Chicago Future Fund pilot except for recidivism, since other programs have not focused on formerly incarcerated people.

The goal is to create the possibility for state and municipal governments to start guaranteed basic income programs funded by taxpayer dollars. But the pilot is currently funded privately by donors, including Black Lives Matter Global, the Borealis Foundation and the Polk Brothers Foundation.

Mayor Lori Lightfoot has proposed a guaranteed basic income program that would give 5,000 low-income families $500 monthly stipends for a year. The City Council’s Black Caucus opposed that plan and argued basic income programs should prioritize Black communities, given the longstanding push for reparations for descendants of Black slaves.

A key benefit of guaranteed basic income programs is they can focus on specific communities that still bear the burdens of systemic racism, Pyon said. Basic income programs can be implemented along with other reparations programs to unravel issues like mass incarceration and generational poverty that have been caused by policies rooted in racism, she said.

The hope is this program can shift the narrative, Pyon said.

“Although reparations has a lot of different pieces to what true reparations are, compensation is a part of that,” Pyon said.

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