Chicago, Los Angeles Launch Universal Basic Income
A woman walks past tents for the homeless lining a street in Los Angeles, California on February 1, 2021. - The federal judge overseeing attempts to resolve the homeless situation has called for an urgent meeting to discuss worsening conditions and the poor official response. Combined now with the coronaviruspandemic and worsening mental health and substance abuse issues, US District Judge David Carter who toured Skid Row last week likened the situation to "a significant natural disaster in Southern California with no end in sight." FREDERIC J. BROWN/AFP via Getty Images

Chicago and Los Angeles are launching a universal basic income program, with the two being the largest basic-income pilots in the United States.

Los Angeles' universal basic income program will give $1,000 a month for a year to about 3,000 families living below the poverty threshold. This amount is the biggest in the U.S. so far, according to a Business Insider report.

There are no rules for how the families should spend the money under the program called the Basic Income Guaranteed: Los Angeles Economic Assistance Pilot. Eligibility can be applied if you live in Los Angeles; 18-year-old; and have an income at or below the federal poverty level.

Applicants should also have at least one dependent minor or pregnant and have been faced with either financial or medical hardships amid the COVID pandemic.

Poverty affects two out of every ten residents in Los Angeles, with most of them being people of color.

The federal poverty level depends on the size of a household. A family of a four-person household earning less than $26,500 would fall under the federal poverty threshold.

Chicago Universal Basic Income Program

Meanwhile, Chicago will give 5,000 low-income households $500 per month for one year. Recipients will be chosen randomly. However, individuals must earn less than $35,000 per year to qualify, according to another Business Insider report.

The program's funding comes from the $2 million in COVID relief dollars allotted to Chicago through the Biden administration's American Rescue Plan.

Around 18 percent of Chicago residents live below the poverty line, with hundreds of thousands of Chicago residents losing their jobs during the first six months of the pandemic.

Chicago Mayor Lori Lightfoot said on Twitter that she knows what it felt like to live check to check growing up.

Labor Shortage

Critics have opposed the programs, saying that it is an example of policies that disincentivize work amid a labor shortage.

Michael Faulkender, the Trump administration's assistance treasury secretary for economic policy, said that there are still millions of low-skilled jobs out there. Faulkender also cited small business owners who can't find workers to join their companies, according to a Fox Business report.

However, several studies noted that cash benefits do not keep people from entering the workforce.

Some members of the Chicago City Council were hesitant to support the program, with members of the Chicago Aldermanic Black Caucus arguing that the money could be better spent on violence prevention or reparations programs.

Meanwhile, Finland's basic-income trial also found that employment rates between stipend recipients and those in the control group were about even.

More economists and lawmakers have been calling for the introduction of Universal Basic Income schemes as the pandemic worsened and exposed huge income inequalities.

Other cities across the United States have also trialed UBI programs.

Los Angeles Mayor Eric Garcetti earlier noted in his annual state of the city address that the city was looking at launching a $24 million UBI program to support the city's poor residents.

Mayors Eric Garcetti and Lori Lightfoot have hailed the programs as necessary steps to lift people out of poverty.

This article is owned by Latin Post.

Written by: Mary Webber

WATCH: LA to give $1,000 no-strings-attached monthly payments to families in new guaranteed-income program - from FOX 11 Los Angeles