45 cities are piloting guaranteed income programs. But will they share the fate of past efforts?

Oakland Mayor Libby Schaaf likes to tell the story of a broken washing machine to illustrate why we need a more flexible safety net in the form of a guaranteed income. 

A developmentally disabled man in Oakland was holding down a job as the main breadwinner in his family. The job required a uniform, which was to be kept clean at all times. The man had no problem with that—until his washing machine broke. His disability made it hard for him to navigate a laundromat so he showed up to work with a dirty uniform. He was ultimately laid off, and the family was now at risk of becoming homeless.

“There is no government program that buys you a washing machine when you need it,” she told viewers of a May 25 webinar hosted by New America. “But that’s what this family needed to be self-sufficient right then. That’s the kind of dignity that our current array of multiple safety net programs that are so targeted don’t address.”

Since the late 1960s, federal officials have acknowledged how broken the safety net is. Ideological positions determine which pieces a person thinks are broken—from conservatives who worry about the work disincentives, to liberals who worry that the system is too punitive and meager. But they can all agree that something needs to be done. 

It’s one reason that locales across the U.S. are trying something different—a guaranteed basic income.

Cash works best. 

It’s like the $200 you get each time you pass Go in Monopoly. 

As the name implies, a guaranteed basic income is a regular payment in cash that serves as a top-up to low wages or incomes. In theory, it is an income floor below which no one should fall. 

Currently, at least 46 guaranteed income experiments are either up and running or about to launch in the U.S. They span 20 states (six of which have Republican governors), the Family Health Project among them. The pilot programs range from serving 10 people to 2000, and they’re giving out between $300 and $1200 monthly to families for one to three years. (See Table 1 for details at the end of this post)

Another 23 mayors have said they may launch such pilots in the future through the Mayors for a Guaranteed Income Initiative (see full list below). Started and funded by Twitter’s Jack Dorsey, and led by former Stockton mayor Michael Tubbs, Mayors for Guaranteed Income (MGI) gives participating mayors $500,000 to jumpstart their pilot programs. Stockton was the first major test of a guaranteed income in the country—and proved remarkably successful.

“I know from growing up with a single mom who went from welfare to work that a little bit of something can really help you a long way,” said LaToya Cantrell, mayor of New Orleans and a member of MGI, on the May webinar.  “You just need that little bit of help to get over the hump. But once you’re over the hump, you roll. I think of guaranteed income from that perspective. It’s not a handout, it’s a hand up, to give people what they need in that moment so they can be well, so they can be healthy.”

New Orleans has launched a guaranteed income pilot for young people aged 16-24 who are not in school or working. It will give them $500 monthly for at least a year. Others are targeting specific groups as well, from artists in San Francisco to homeless individuals in Denver, to older LGBT in West Hollywood to the formerly incarcerated in Gainesville, Florida.

Most of the 46 pilot programs are privately funded with philanthropic dollars, though a handful of cities are using COVID relief funds. Others, like Los Angeles, are turning to city coffers. Mayor Garcetti is asking for $24 million to fund a pilot in Los Angeles. 

Beyond the local pilot programs, a handful of state legislatures (California, New York, New Jersey, and Massachusetts) have introduced bills for statewide pilots or full-on programs. California’s bill for a $35 million state-funded guaranteed income for expectant mothers and youth aging out of foster care was approved mid-July of this year. A New Jersey Congresswoman is pushing for a national guaranteed income pilot. 

A movement is afoot to show that investing in health, well-being, and stability is the best investment morally and financially.

What COVID Wrought—A Change of Heart

It’s like a vaccine for poverty

COVID exposed the fragility of many working Americans as business shuttered and jobs disappeared. Even before the pandemic, Americans were on financially shaky ground. But suddenly adrift without a job, millions applied for unemployment insurance and flocked to the health marketplace for affordable health insurance they lost when they were laid off. 

Suddenly there was a lot of empathy out there.

Before the pandemic, a 2019 poll found that among registered voters, 57 percent were opposed to the idea of giving Americans $1,000 per month while 43 percent supported it. A year later in the midst of COVID, the majority (55 percent) thought it was a great idea, up fully 12 percentage points from 2019. Among Republican voters, support grew from 27 percent last winter to 34 percent support in August 2020.

A guaranteed income was looking more and more like a financial vaccine.

Not a New Idea—Nixon’s Family Assistance Plan 

And a familiar demise

As many have noted, the U.S. toyed with the idea of a guaranteed income as far back as the Johnson administration when economists were promoting a negative income tax. But Johnson feared his declining political fortunes would doom it.

The idea lay dormant until 1969 when Nixon revived it in a new form called the Family Assistance Plan—a not-so-veiled attempt to “fix” the cash welfare program, Aid to Families with Dependent Children (read: eliminate it).

The Family Assistance Plan would provide a minimum guaranteed annual income (subject to work requirements) of $10,000 to every family in America (in today’s dollars). At the same time the FAP would reduce other safety net benefits by half of one’s earned income until a break-even point of $25,700 (adjusted). 

But first, to fortify their argument that the FAP was more efficient and wouldn’t be a work disincentive, the administration tested it. At five sites across the country, the government gave a small group of families a steady monthly income and compared them to a control group that received nothing.

The results showed that giving families a steady income did not generally dissuade men from working, though it did give women enough wiggle room to quit their job. It also showed some preliminary signs of helping kids. School attendance, for example, improved. 

Interestingly, the costs of operating the existing welfare programs were three times higher than the cost of operating one of the larger guaranteed income programs (1,310-$1,965 per person to operate the welfare programs versus $470-600 per person for a guaranteed income (inflation adjusted)

Yet the evidence would not be enough to win over the Senate. And not because of a Republican blockade as one might expect. Instead, the far Left at the time was adamantly opposed to the FAP on the grounds that it didn’t go far enough. It was, they argued, still conditioned on working, which was a sure way to commit more Black people to penury when racial discrimination prevented many Black mothers from finding jobs. A similar argument would reappear in 1996 during welfare reform. 

In the end, the guaranteed income died in the Senate before it could get off the ground. 

And here we are again.

Food for thought

What are the ethics of stopping the money? 

The excitement for a guaranteed income is growing, though history and America’s deep-seated fears of “handouts” and the prospect that someone might be getting something for nothing might condemn it to yet another of history’s dustbins. The nation came close with the Family Assistance plan, and it too conducted several pilot test runs with good results. But the end result was still defeat on political grounds. 

The numerous pilots underway also beg the question–do we need 45 more pilot studies? One hopes the Mayors for a Guaranteed Income and others are marshaling their arguments beyond proof that it works—given the not-so-distant history lesson. And more importantly, what happens to the people in 12 or 18 months when the pilot ends? What are the ethics of giving low-income families a godsend for a year and then taking it away? 

Our own guaranteed income pilot in Massachusetts is hoping to continue beyond one year. In fact, we have not put an end date on it, and we are working to create a program that can scale nationwide. With scale and a steady funding source, there is no reason to stop—because we know this works.