Is a National Guaranteed Income on the Horizon?

Here are some anecdotes from participants in a Georgia program designed to support Black women with low incomes:

• “I was able to pursue my passion for animals by enrolling in school to become a veterinarian. Without the extra funds from this program, I wouldn’t have been able to take this step.”
• “The month that we received our first payment, my daughter became ill, and I missed LOTS of work to care for her and take her to appointments and to stay in the hospital with her. This money has helped our family tremendously with hospital, medical, and medication expenses.”
• “As far as my mental and physical health, I can sleep better at night and wake up without feeling stressed out, knowing that I can pay bills each month and save some money.”

Each of these women are participants in “In Her Hands,” a pilot guaranteed income program that gave participants $20,400 over two years.  The program is funded by the Georgia Resilliance and Opportunity Fund (GRO), a nonprofit dedicated towards using evidence and community-based solutions to address poverty and the racial wealth gap.

This pilot program gives an average of $850 a month to 654 participants—with no strings attached. In Her Hands is centered on the premise that giving people the extra cash they need will help them tackle crushing debt and allow them the flexibility to make long-range financial planning and life decisions.

Georgia is not the only state to experiment with a guaranteed income program. Programs have taken off in all regions of the country. And in the not-too-distant future, the idea may take off nationally.

To evaluate the effectiveness of In Her Hands, a broad consortium of academic scholars and public policy experts conducted an evaluation at its one year anniversary.  It was led by Leah Hamilton, a professor of social work at Appalachian State University. Hamilton’s research group compared the low-income women who participated in the program to a control group who qualified for the program but were not chosen to participate and receive benefits.

In an interview with The Progressive, Hamilton says that, compared to the control group, participants had much less difficulty paying their bills, fewer utility shutoffs, and fewer missed housing payments and evictions. They did not have to rely as much on payday loans, pawn shops, and raising money through plasma donations. They had stronger rainy-day funds, which led to them being less likely to skip needed medical care and 50 percent more likely to be enrolled in higher education.

“It helps people get their feet under them to start thinking about those things [long-term investments], start thinking about how to build a small business,” Hamilton says. “How do I start saving for the long-term, rather than just being in a survival cycle.”

In sharp contrast with many current welfare programs like Medicaid, Temporary Assistance for Needy Families (TANF), and Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program), guaranteed income programs do not include as many requirements or means-tested qualifications that recipients have to meet.

“It directly gives families cash,” says Shafeka Hashash, associate director of guaranteed income at the Economic Security Project. “They can actually define what their goals are.”.

The Economic Security Project is a nonprofit focused on guaranteed income and anti-monopoly issues.

Many of the current means-tested programs cut off benefits if the recipient has a job with a slightly higher wage. Guaranteed income, with its more generous benefits, does not include a cut off.

“It gives people runway to build towards their own personal goals without penalizing them every time they take a small step forward,” says Hamilton.

Along with having to deal with less red tape than traditional welfare programs, supporters of Guaranteed Income see another advantage for recipients.

“A lot of programs, especially TANF, but SNAP and Medicaid too, have not increased their asset limits since the 1980s,” Hamilton says. “We are talking [asset limits of] $2,000 in some states . . . How is a person supposed to build their own financial safety net?”

Most, if not all, Guaranteed Income pilots do not have asset limits for recipients whose low income qualifies them for these programs, Hamilton says.

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Like any major public policy proposals, this one is not without its critics.

First and foremost is the argument that no-strings cash payments discourages people from working and promotes a “culture of dependency.”     

“Nothing has shown that guaranteed income or direct cash kills people’s [work incentives],” says Hashash. Would people quit their regular jobs for $6,000 a year, she asked rhetorically.

Hamilton explains that because of stagnant wages, low-income people who work are typically working three or four jobs to make ends meet.  

For decades, Democratic and Republican politicians have boosted their careers by attacking social welfare recipients.

Another criticism of guaranteed income is that recipients, left to their own devices, would fritter away the money and not spend it on necessities. For example, Senator Joe Manchin, Democrat of West Virginia, blocked the extension of the federal child tax credit, claiming that recipients would misuse the payments for drugs.

Proponents say none of the evidence supports that claim.“The money is being spent on food, groceries, and utilities,” says Hamilton. While supporters of guaranteed income tout its benefits, they are also aware of its limitations. They stress that the program would be a supplement, not a substitute for needed social programs. 

“$500 a month will not cover health needs,” Hamilton adds.

Hashash stated that in areas lacking high-paying jobs, guaranteed income by itself would not be enough.

For decades, Democratic and Republican politicians have boosted their careers by attacking social welfare recipients. Ronald Reagan attacked “welfare queens” to shore up support for social services cuts. Bill Clinton campaigned in 1992 on ending “welfare as we know it.” In 1996, Clinton signed the Welfare Reform Act into law that significantly increased qualifications that potential recipients would have to meet. It resulted in welfare rolls being dramatically slashed mainly by turning the screws on poor people. The law was popular with the general public and resulted in a dramatic downsizing of welfare rolls.

But recent events may be breaking down the stigma toward social welfare programs.

“What the pandemic did super well is highlight to folks that things in life can just happen,” says Hashash. “You can be doing everything ‘correctly’ and something can knock you off your feet . . . . It opened our eyes up to the fact that cash assistance could be very popular and that the government could really mobilize on a fast scale to make it happen [stimulus checks, the child tax credit].”

Under the expanded child tax credit, families were provided with a tax credit of up to $2,000 per year for every child under seventeen. It was estimated that 90 percent of families with children received an average benefit of $2,390 per year in 2022, which is likely why it was supported by 75 percent of the public.  

This political shift is also reflected in the growth in the number of guaranteed income pilot programs. Hashash notes that five years ago there were only two; currently, there are more than 155.

These pilot programs are funded at the local level by nonprofits, city, or state governments. Not only has the number of pilots increased, but so has their diversity. Some pilots target low-income veterans, some formerly incarcerated people, or low-income undocumented workers.

But even with all this policy growth, proponents know this is not enough. A federal standard is necessary.

“The future of economic security in the United States cannot look like a patchwork of local pilots on a temporary basis,” says Hamilton. 

Some are optimistic that this will happen in the not-too-distant future given the recent surge of local pilot programs.

“We believe that guaranteed income could genuinely be possible, our goal is within the next decade. With the pilots happening now, the policy wins that they are having…and the movement that is building, this [a federal program] really could be feasible,” said Hashash.