What is a guaranteed income?

A guaranteed income, also known as universal basic income (UBI), is a system of widely distributed, regular, unconditional cash stipends.

Variations of guaranteed income have surfaced throughout history: Thomas Paine proposed the idea in Agrarian Justice, Martin Luther King, Jr. advocated for a guaranteed income, early 20th century economists defined the idea as a negative income tax, and Richard Nixon and Daniel Patrick Moynihan joined forces to advocate for an income floor that almost made it through Congress in the 1970s. We also have a modern-day version of a guaranteed income: the state of Alaska distributes an annual dividend to every Alaskan.

Here’s what we know about unconditional cash: it works. In No Strings Attached: The Behavioral Effects of U.S. Unconditional Cash Transfer Programs, the Roosevelt Institute and Economist Ioana Marinescu summarize the empirical evidence from three major natural experiments previously conducted in the United States. Across the basic income experiments, educational achievement increased, health outcomes substantially improved, and there was no effect on labor market supply (a commonly cited concern).

While we have some evidence here in the United States and Canada, internationally cash transfers have been one of the most thoroughly researched anti-poverty interventions. Academics at leading institutions have proven time and time again that when given unconditional cash, the poor take care of their most basic needs and use the free time to focus energy on climbing up the economic ladder--finding a job, starting their own businesses, getting a degree.

Has a basic income ever been implemented?

While the most aggressive version of a guaranteed income has never been implemented in the United States, there have been a number of experiments in the United States and Canada examining the effectiveness and impact of cash. The Eastern Band of Cherokee Indians delivers a dividend to all adult tribal members and the Alaska Permanent Fund (PFD) distributes approximately $1,000-$2,000 a year to every man, woman, and child in Alaska. More recent studies are underway in nearby Oakland, Ontario, Kenya, and other localities worldwide.

The Stockton pilot is a part of a growing movement for unconditional cash programs and an income floor across the country.  In April, the Hawaii House of Representatives declared basic economic security as a right in Hawaii, and created a working group to explore universal basic income. Led by Representative Chris Lee, this legislation is the first of its kind in United States history. Y Combinator announced in September their proposal for an expansion of their basic income study. The Put a Price on It D.C. campaign is fighting for a carbon cap and dividend system, which would create a fee for all companies that buy and sell fossils fuels in D.C., and rebate the money back to D.C.’s working families.

National leaders are also advocating for unconditional cash – earlier this year, Congressman Ro Khanna (CA-17) proposed a national basic income program on Capitol Hill, calling for a massive increase to the Earned Income Tax Credit. In August, Deputy Chair of the Democratic National Committee Keith Ellison endorsed a guaranteed income. In January, President Obama advocated for a basic income conversation in the coming years. With Mayor Tubbs joining the fight for economic security, the list of supportive national leaders continues to grow.