The COVID-19 pandemic and economic crisis amplified long-standing racial, gender, and income inequities in California and the US and highlighted the critical need for bold investments to strengthen the safety net so that all people can meet basic needs, crisis or not.
In particular, the pandemic accelerated a growing movement around Guaranteed Income – the idea that government should provide people with unconditional cash support to ensure that everyone has a minimum level of income to meet basic needs. This once radical concept went mainstream during the pandemic as the federal response to the crisis centered on cash-based policies, including recovery rebates, new federal unemployment benefits, and a significantly expanded federal Child Tax Credit. The success of these policies, together with emerging success stories from local Guaranteed Income pilots that started before the pandemic, helped build energy around providing unconditional cash as a permanent public policy.
Understanding what Guaranteed Income is, what values it promotes, and what it means for our existing safety net is important as policymakers and advocates look to guide the state in recovering from the pandemic and building an equitable California for its people and communities. This is the first of a two-part Q&A series on Guaranteed Income and California’s safety net; part two will focus on key questions about implementation of Guaranteed Income.
Jump to question
- What is Guaranteed Income and how does it compare to Universal Basic Income and to other safety net supports?
- What are the origins of Guaranteed Income in this US?
- What are the key ideas and values behind Guaranteed Income and providing direct cash support to people?
- Are there opportunities to improve existing safety net programs and public supports in ways that align with promising features of Guaranteed Income?
- Where has Guaranteed Income been tried in California and around the US?
- What do recent changes to the federal Child Tax Credit show us about opportunities to expand unconditional cash support to families, similar to Guaranteed Income?
What is Guaranteed Income and how does it compare to Universal Basic Income and to other safety net supports?
Guaranteed Income (sometimes called basic income or guaranteed basic income) is an unconditional, often recurring cash payment provided by the government intended to help build an income floor below which no one can fall. Unlike Universal Basic Income (or UBI), which is envisioned to reach all people – even those with significant income or wealth – Guaranteed Income is intended to target communities most in need of cash. In this respect, Guaranteed Income is similar to other need-based cash supports and safety net programs, which aim to help people meet basic needs.
Proponents of Guaranteed Income envision it as more accessible to people than existing safety net programs because it comes without the policy and administrative strings often attached to other supports, such as work requirements – though as discussed below, there are also opportunities within existing safety net programs to remove barriers and improve access. Guaranteed Income is also often envisioned to reach Californians who are blocked from existing supports due to discriminatory federal and state policies, such as people who are undocumented or people who were formerly incarcerated.
What are the origins of Guaranteed Income in the US?
The modern concept of a guaranteed income in the US can be traced to racial and gender justice movements of the 1960s. The Black Panther Party’s platform declared that government has a responsibility to guarantee everyone a job or a minimum income. Similarly, Martin Luther King, Jr. called for a job for everyone who wants to work or a guaranteed income in his final book, Where Do We Go From Here? Chaos or Community. In addition, the National Welfare Rights Organization, which was led primarily by Black mothers, fought to change racist and sexist narratives around welfare and argued that everyone should be guaranteed a decent standard of living as a right, regardless of whether they work for pay.
What are the key ideas and values behind Guaranteed Income and providing direct cash support to people?
Three key ideas included in the concept of Guaranteed Income have a strong basis in equity values that guide how a society can enable people to live and thrive in their communities. Research evidence also backs up the effectiveness of these approaches for supporting people in meeting their basic needs:
1. Recognizing that basic economic security should be guaranteed regardless of work status: All people should have access to the support they need to meet their basic needs. This core value should hold firm regardless of whether an adult has a job or not and whether a child’s parent or guardian is working for pay or not. Work requirements have a long racist history in the US, directly contributing to racial inequities in who struggles to meet basic needs. Yet many public supports in the US require that individuals or families show that they have earned income or have completed work requirements in order to be eligible for support. The share of public support that is only available to people who are working has increased in recent years, blocking access for many individuals and families at the highest risk of experiencing homelessness, hunger, and other hardships.
Research shows that most California households with low incomes are already working anyway – they simply do not earn enough to get by because of low wages combined with unaffordable costs for housing, child care, and other necessities. Research on welfare-to-work programs also has found that work requirements were not linked to meaningful improvements in stable employment or reductions in poverty for program participants. Providing basic needs support without excluding people who are not working for pay is a more effective and more equitable policy approach.
2. Providing unrestricted cash support: In terms of values, unrestricted cash support respects the dignity and autonomy of recipients by allowing people to choose for themselves the best way to spend their resources. Also, when support is provided as unrestricted cash, families and individuals have the flexibility to address whichever needs are most pressing. In this way, cash can be more effective and efficient than providing support in the form of in-kind benefits (like food or clothing) that may or may not address a family’s most urgent current needs.
Studies have demonstrated that unrestricted cash support for households with low incomes is linked to better physical health, mental health, and school achievement, and increases in children’s employment and earnings in adulthood. Emerging research specifically from recent Guaranteed Income pilot projects has also shown promising results.
3. Minimizing red tape and burdensome requirements for participants: Simplifying and streamlining access to supports is important to ensure that complicated paperwork and burdensome participation requirements do not block individuals and families from receiving the support they need.
Research in California and nationally documents that people who are eligible for support often fall through the cracks simply because of bureaucratic processes that are difficult to navigate. In fact, burdensome administrative processes have often been intentionally deployed to block eligible people from accessing public support – particularly Black and brown people. Removing these barriers is important to make public support systems more equitable.
more in this series
See the Budget Center’s part two Q&A: Implementing Guaranteed Income Through Cash and a Strong Safety Net
Are there opportunities to improve existing safety net programs and public supports in ways that align with promising features of Guaranteed Income?
Existing public safety net programs are critical to helping millions of Californians make ends meet. Safety net programs that help people meet their needs for health care, food, housing, child care, and other basic needs provide support to more than 1 in 3 Californians every year, and research shows that California’s poverty rate (under the California Poverty Measure) would be more than one and a half times as high without these important public supports.
There are many policy and administrative opportunities to apply key ideas from Guaranteed Income to improve these existing public supports – particularly in terms of streamlining access and removing burdensome or inequitable participation requirements. For example, in the early stages of the COVID-19 pandemic temporary changes were adopted for supports such as CalWORKs (or TANF), CalFresh (or SNAP), and Medi-Cal (or Medicaid) that reduced required paperwork and office visits and removed work requirements in order to facilitate access to needed assistance. Maintaining and building on these types of changes would make existing supports more equitable and would align with Guaranteed Income values and practices. Proactively coordinating eligibility and application processes across the systems that administer different supports would also streamline access to needed resources. Some of these changes can be made by state and local policymakers, while others would require action by federal policymakers.
Where has Guaranteed Income been tried in California and the US?
Guaranteed Income has not yet been implemented at scale as an ongoing federal, state, or local policy, but dozens of smaller-scale pilots are underway in California and the US, typically spearheaded by mayors or other local leaders. (See maps compiled by Mayors for a Guaranteed Income and the Stanford Basic Income Lab.) Two of the most well-known recently completed pilots include the Magnolia Mother’s Trust in Jackson, Mississippi, and the Stockton Economic Empowerment Demonstration (SEED), in Stockton, California.
At the state level, California recently became the first state to provide state funds to support local Guaranteed Income pilots. In 2017, Hawaii was the first state to explore Guaranteed Income as a possible state policy through a “basic economic security working group,” and Alaska has had a Universal Basic Income-like policy in place since 1982 – the Alaska Permanent Fund, which pays annual dividends to every state resident based on state oil revenues.
What do recent changes to the federal Child Tax Credit show us about opportunities to expand unconditional cash support to families, similar to Guaranteed Income?
Recent changes to the federal Child Tax Credit show how policymakers can modify existing safety net programs to make them more like Guaranteed Income. The American Rescue Plan Act, signed into law in March 2021, made the Child Tax Credit fully available to families with the lowest incomes – without any work requirements. This change is expected to extend the credit to 27 million more children, essentially establishing a Guaranteed Income for families with children in the US, helping to ensure that all children can grow up with support to meet their basic needs, whether or not their parents or guardians are working for pay. Although this change was put into place for just one year, advocates are working to make it permanent and to ensure that the credit is permanently extended to immigrant children who were excluded during the Trump Administration, so that all families with children can count on having a guaranteed income each year to meet their basic needs.