In February 2021, the Stockton Economic Empowerment Demonstration, or SEED, officially ended, completing a project that had given $500 monthly, with no restrictions, to 125 residents of Stockton, California, for two years. (The project was originally slated to last eighteen months but was extended due to the coronavirus pandemic.)
The results from the first year of the program were released in March, and they are promising: Recipients had improved mental health, were more economically stable, and were even more likely to find full-time work. “I sleep better,” said one SEED participant. “My mind’s not racing all the time thinking about next month’s rent.”
Preliminary, anecdotal findings from SEED had shown similar potential—and then a pandemic spiraled into an economic crisis, intensifying national interest in the project. In June 2020, then-Mayor of Stockton Michael Tubbs created a network of mayors committed to the concept of guaranteed income for their own cities. They called it Mayors for a Guaranteed Income, or MGI.
Cash with no strings attached allows people to spend money on what they decide they need—whether it’s diapers, a new washing machine, or a birthday party for their kid.
At the time of the announcement, Tubbs, who lost his re-election campaign in November, had ten other mayors on board; now there are fifty, all Democrats. Mayors in cities from Shreveport, Louisiana, and Gary, Indiana, to Montpelier, Vermont, and Santa Fe, New Mexico, have signed on, and the group is still growing. As of mid-May, more than a dozen cities had guaranteed-income pilot programs in various stages of the planning and implementation processes. (Not all mayors in the network plan to conduct a pilot.)
Of MGI-partnered cities, twenty-one have publicly announced pilots and some are currently providing benefits, many supported with initial grants from the MGI network. Several more pilots plan to launch this year, including some non-MGI pilots run by private organizations, rather than cities.
Generally, these pilots are similar to the Stockton model in that they provide small-scale cash distributions to a small sample of people; but they differ in size, cash amount, and target population. For example, Hudson, New York, is providing $500 per month to twenty-five residents, while Compton, California, is sending monthly cash payments of $300 to $600 to 800 residents and Los Angeles may send $1,000 monthly to 2,000 families for one year.
Most participants live in low-income areas, and some pilots may also target specific populations. Gainesville, Florida, is planning a pilot for the formerly incarcerated, and Richmond, Virginia, is sending cash to people who are ineligible for public benefits but still don’t make a living wage.
While media headlines have touted the projects as “universal basic income pilot” programs, they are in fact not universal, and the payments are too small to cover anybody’s basic needs. Most pilots intentionally call themselves “guaranteed income,” yet universal basic income, guaranteed income, and basic income continue to be conflated. What they do have in common, however, is that they are all unrestricted cash payments.
For some, the diverse political bases supporting unrestricted cash payments add to their appeal, with early proponents ranging from Martin Luther King Jr. to Milton Friedman. President Richard Nixon attempted to pass such a program (it failed after he got spooked by advisers warning him that people would turn into profligates). Tech enthusiasts in Silicon Valley, seeking answers to the “what-about-the-robots question” (i.e., automation), have signaled their support. And feminists have long seen unrestricted cash payments as potential compensation for unpaid care labor.
Yet the lack of shared ideological consensus around unrestricted cash payments should give us pause.
Conservatives and libertarians including Friedman often favor unrestricted cash payments as a neat way to dismantle the welfare state. Instead of the bureaucracy of dozens of different public assistance programs, there’s just the one. Democratic 2020 presidential primary candidate Andrew Yang’s “Freedom Dividend” would have replaced the safety net for those receiving the dividend.
“Guaranteed income is a step toward alleviating economic vulnerability.”
Meanwhile, on the political left, as expanding inequality has dovetailed with wage stagnation and a decline in job opportunities, a guaranteed income is seen as something that could beef up, rather than replace, the current safety net. After all, the welfare system is so attached to work and administrative hurdles that many low-income people don’t currently receive the assistance for which they’re eligible.
The Mayors for a Guaranteed Income website greets visitors with a quotation from Martin Luther King Jr: “I am now convinced that the simplest approach will prove to be the most effective—the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” It is from his 1967 book, Where Do We Go from Here: Chaos or Community?
King had in mind a more expansive version of guaranteed income than in any of these pilots. He wanted to peg it to the median income so as not to create a floor that would “freeze into the society poverty conditions.” Still, King’s justice-focused vision is what undergirds MGI.
The network of mayors is “using guaranteed income as a tool for racial and gender equity,” says Sukhi Samra, director of MGI and director of SEED. Because so many Americans live paycheck-to-paycheck, Samra says a guaranteed income of roughly $500 provides “an income floor” through which people experience less income volatility and can pay for an emergency expense without facing financial ruin.
Meanwhile, she says, MGI’s pilots are building public support and the political will necessary to win a federal guaranteed income.
Sumbul Siddiqui, the mayor of Cambridge, Massachusetts, joined MGI last October. In mid-April, Cambridge RISE (Recurring Income for Success and Empowerment) officially launched.
Cambridge is home to some of the nation’s oldest wealth, via Harvard University and the Massachusetts Institute of Technology, and some of its newest, through biotech companies like Moderna. In the shadow of these behemoth institutions are families living in poverty.
Siddiqui grew up in public housing in Cambridge and knows from experience the value of unrestricted cash to low-income families.
“People need cash, and they know what to do with cash,” the mayor says. “We shouldn’t be dictating how [families] spend it.” Cash with no strings attached allows people to spend money on what they decide they need—whether it’s diapers, a new washing machine, or a birthday party for their kid.
Cambridge RISE will deliver $500 monthly to 120 families with children headed by a single caretaker. “Guaranteed income is a step toward alleviating economic vulnerability,” Siddiqui says in an interview. “It’s not going to solve everything.” There will still be economic and racial inequities in housing, policing, and education. But, the mayor says, “it represents one thing that we can do.”
When the pandemic rocked Saint Paul, Minnesota, and homelessness surged, tens of thousands of city residents applied for unemployment insurance. The city’s response, says Mayor Melvin Carter in an interview for this article, had to be “reciprocal to the scale and scope of the problem.”
People want to “have the knowledge and peace of mind that they could survive and eat and feed their children while they are learning how to transition into this new world.”
Under Carter, who has served as mayor since 2018, Saint Paul had already been using city resources to fight poverty, even opening an official Office of Financial Empowerment. Carter was one of the founding members of MGI in June 2020, and launching a guaranteed-income pilot seemed like a natural next step. Since September 2020, 150 Saint Paul families with babies in certain low-income areas have been receiving $500 monthly through the People’s Prosperity Pilot. (These families are also part of a college savings initiative run through the Office of Financial Empowerment.)
Unlike most other pilots, which rely solely on grant funds and private donations, Saint Paul is funding its program using a mix of private philanthropy as well as CARES Act funding and funding from the state. “The nonprofit sector can’t do it sustainably, philanthropy can’t do it sustainably, all they can do is show us what the possibilities are,” Carter tells me. He hopes the pilot’s use of public money “communicates to our community members that we believe in them enough to invest in them.”
Carter says other pilots are considering using American Rescue Plan dollars to start their pilots. Initial results from Saint Paul are expected early next year.
SEED’s first-year results add to a rich pile of persuasive evidence demonstrating the power of unrestricted cash payments, whether projects are called universal basic income or guaranteed income. Manitoba, Canada, ran a basic income experiment for low-income households between 1974 and 1979—hospitalizations fell and so did the stigma often associated with “welfare.” The Alaska Permanent Fund Dividend cuts annual checks to each state resident (in 2019, this amount was $1,606), allowing them to share in the riches of the state’s natural assets, with no real effect on employment.
A number of cash transfer projects have been conducted in East Africa by the charity GiveDirectly—which, as its name suggests, gives money directly to the poor. Contrary to prejudice, people spend the money on food, housing, and ways to improve their lives, not vices.
Since 1996, the Eastern Band of Cherokee Indians has allotted profits from a casino to each member of the tribe, and poverty has fallen while children are less likely to get involved in crime and have better educational attainments; even parent-child relationships have improved.
Participants in the Magnolia Mother’s Trust, a program that since 2018 has given $1,000 per month to low-income Black single mothers in Jackson, Mississippi, report worrying less and feeling more hopeful about the future.
This is just a sample of hundreds of demonstration projects around the world. Soon, there will be a flurry of additional data from the legion of guaranteed-income pilots, mostly analyzed by the Center for Guaranteed Income Research at the University of Pennsylvania, which was launched to handle pilot evaluations.
All the evidence so far, collected since the 1970s, suggests that cash payments work. So why do we still need dozens of pilots across the country?
The real value of pilots isn’t the data they collect but what they can build toward.
Stacey Rutland is the founder and president of Income Movement, a national organization with a grassroots strategy to win a federal basic income. She was a volunteer for the Yang presidential campaign and noticed that the people who universal basic income was designed for weren’t central to the strategies of the organizations lobbying for it.
Income Movement helps supporters of guaranteed income to become advocates. Recently, the group has been demanding recurring stimulus payments, delivering petitions to Senate offices in the form of “past-due” invoices. Oregon Senator Ron Wyden’s staff met with Income Movement activists, and he later drafted a letter with twenty other Senators urging the Biden Administration to adopt recurring checks.
Though Income Movement is agitating for universal basic income, it is also a partner of Mayors for a Guaranteed Income. Rutland says guaranteed income “is most likely going to be the core stepping stone toward universality. Not only is it politically more viable, but it also addresses the mass economic inequality that’s happening in our country.”
In April 2020, billionaire Jack Dorsey, chief executive officer of both Twitter and Square, pledged to donate $1 billion “to fund global COVID-19 relief,” as he wrote in a tweet. “After we disarm this pandemic, the focus will shift to girls’ health and education, and [universal basic income].”
At the time, his pledge equated to approximately 28 percent of his net worth of $3.9 billion. As of mid-May, his wealth had increased to about $11 billion.
In July 2020, Dorsey announced a $3 million donation to Mayors for a Guaranteed Income, just after the initiative launched. He then donated $15 million to MGI in December, money that has since been exhausted by the new pilots.
Many MGI pilots partner with community-based organizations and other philanthropies on the ground, and some like Saint Paul use a mix of public and private funds. But the bulk of the money making most pilots possible is coming from one person: Dorsey.
Of the approximately $400 million that Dorsey has given to charities over the past year, MGI has gotten $18 million, while other universal basic income, guaranteed income, or cash payment initiatives have received at least $57 million. That means nearly 20 percent of the $400 million has gone to cash grant projects, as of mid-May.
Like his tech brethren, Dorsey is interested in cash payments because he’s interested in universal basic income. On Andrew Yang’s podcast in June 2020, Dorsey shared that he is a believer in this approach, which “to me represents a floor.” But Dorsey’s vision is shaped by the looming specter of automation. He wants people to “have the knowledge and peace of mind that they could survive and eat and feed their children while they are learning how to transition into this new world.”
Dorsey, it seems, is caught between “the robots are coming” and the moral argument for guaranteed income, perhaps feeling a sense of responsibility to throw money at the problems that billionaire capitalism has caused. After all, if the robots do come, they’ll only increase productivity.
If people like Dorsey remain in positions of influence, all of those benefits will flow directly to them, not us. But perhaps universal basic income will be in place as a defensive measure—defending against deprivation as well as billionaire blame.
Even before the pilots, we’ve known that something like guaranteed income could change millions of people’s worlds by reducing inequality, increasing leisure time, lessening income volatility, and just generally enhancing economic stability. Pilot data, though small-scale, will surely add to this assessment.
For now, some people across the country will for a little while receive regular cash during an economic crisis, learning firsthand the role that guaranteed income can play in improving well-being and security.