Guaranteed Basic Income Gets a New Life

Guaranteed Basic Income Gets a New Life
Guaranteed Basic Income Gets a New Life

By Elizabeth Meisenzahl

See original post here.

Cities around the country are using federal funding from the American Rescue Plan (ARP) to implement pilot universal basic income (UBI) and guaranteed basic income (GBI) programs. Under these programs, residents receive regular cash assistance with no strings attached or requirements for how they spend the money. UBI plans provide cash to all residents without means testing, while GBI programs are more targeted to particular groups in need.

In Rochester, a midsized city in western New York, advocates hope that high demand for a new GBI pilot will mean the eventual establishment of a permanent program in a city with extreme need.

The Rochester GBI pilot program will provide $500 each month for a year to 351 individuals living at or below 185 percent of the federal poverty level. The number of individuals involved in the pilot is proportionally similar to those in programs offered by larger metropolitan areas, says Jeremy Rosen, director of economic justice at the Shriver Center on Poverty Law.

The demand for the program became clear as soon as the application went live on June 22. Within 45 minutes of the application going up, 2,000 city residents applied to be a part of the pilot. The winners will be selected randomly via a lottery.

For residents of Rochester and its surrounding area, the immediate demand for the program was no surprise. The city had been a prosperous industrial boomtown along the banks of the Genesee River and Erie Canal, starting in the early 19th century. As mill work declined, it became a new hub of photography and xerography due to the founding of Eastman Kodak and Xerox, respectively.

But since then, Rochester has experienced the kind of economic fall common to Rust Belt cities in the Northeast and Midwest. Starting in the 1950s, manufacturing jobs disappeared, and the city’s population started to shrink. By 2010, it was smaller than it had been a century earlier.

Some of the economic damage was compensated by new jobs in higher education and health care, both of which have grown rapidly in the 21st century in Rochester. But unlike manufacturing, such jobs typically require lots of education and training. Cities like Rochester now have a widening gap between their highly educated “eds and meds” workers and those who perform low-paying care work, often in poor conditions—and that’s if they have jobs at all. Over the past decade, Rochester has had a significantly higher unemployment rate than the state and country, nearly half its children live in poverty, and the city consistently ranks among the most impoverished compared to similar-sized metropolitan areas.

A guaranteed income program is a way to not only put money in the pockets of some of the people with the greatest needs but also to dispel myths about direct cash assistance.

Discussions of a GBI program began in and around Rochester over a year before the ARP funding reached the city. In 2020, the city and Monroe County formed the Commission on Racial and Structural Equity to address systemic inequalities within the county. The commission recommended, among other policies, a basic income for pregnant women at risk of maternal mortality. Beginning in the summer of 2021, a new committee focused solely on reparations and UBI began seeking community input. From those discussions, the Rochester-based nonprofit Black Community Focus Fund was selected to work with the city to administer a GBI pilot, which will be the city’s first experiment with a guaranteed income. The required $2.2 million will come from a small portion of the city’s $202 million from ARP.

And Rochester is not alone. At least 31 cities are currently undertaking guaranteed income pilot programs, many of them funded at least in part by ARP money.

For Damon Wilson, a program director at BCFF who has worked closely with Rochester officials in support of the pilot, a guaranteed income program is a way to not only put money in the pockets of some of the people with the greatest needs in the city, but also to dispel myths about direct cash assistance.

“No one has skepticism for people who have wealth and how they spend their money, but when it comes to people who are living in poverty, we want to question everything they do,” Wilson says. “We monitor their every movement because there’s a lack of trust. So I’m hoping that programs like these across the nation will start to dispel some of those fears and those anxieties around people living in poverty.”

Wilson’s perspective on the importance of guaranteed income is part of a growing shift in thinking around social welfare benefits, especially on the local level. The COVID-19 pandemic created a window of opportunity for policymakers to push the boundaries of what government’s role is and what kind of assistance it can provide, says associate director of Stanford’s Basic Income Lab Sean Kline. After all, one of the signature features of the CARES Act pandemic relief was the famous $1,200 payment that most Americans received.

Combined with the surge of federal funding for cities through ARP, the wave of bolder thinking about benefits in local government has led to a new wave of guaranteed income pilots. On one level, it’s odd to think of this as innovative research. Political philosophers proposed the concept in the 18th century, and theories around it developed throughout the 20th century from intellectuals across the political spectrum. More recently, Democratic presidential candidate Andrew Yang popularized the idea of a federal UBI in his 2020 presidential campaign.

But in terms of actual implementation on the city level in the United States, the history of guaranteed income programs is not long. Stockton, California, burst onto the guaranteed income scene in 2019 as an early proponent of local guaranteed income pilots. The program there was a resounding success, and led then-Mayor Michael Tubbs to found Mayors for a Guaranteed Income to spread the policy to cities across the country.

The Stockton experiment found that recipients of guaranteed income had improved health outcomes by the end of the study. Rates of full-time employment also increased over the course of the first year. While critics of guaranteed income—or any kind of social welfare program with no-strings-attached cash—argue that aid disincentivizes working and encourages poor spending choices, the results in Stockton showed exactly the opposite. People, especially those living in poverty, knew their needs best, and direct aid allowed them to meet these.

The long-term future of these programs, however, is currently unclear, in large part because many pilots are in place for one to two years, and are still under way. Cities like Rochester will use the pilots as a form of research into whether guaranteed income works to reduce poverty among its recipients, although long-term viability would likely require additional state and/or federal funding.

Still, advocates are optimistic that the current wave of pilots will mean an expansion of guaranteed income programs—both to new cities and to higher levels of government. City governments are necessarily limited compared to states and especially the federal government, both of which have more money to spend on social welfare programs. Pilots like Rochester’s, Rosen says, have the possibility to show states and the federal government that direct cash assistance programs like UBI and GBI are successful at reducing poverty.

“If we have all these pilot programs and we don’t go beyond that, we will have certainly helped people, and that will be great. But we’ll be minimizing our overall impact,” Rosen says. “We really want to see systems of delivering public benefits and cash assistance change in the long term so that we can help many, many more people for many, many years to come.”

You may also be interested in...


  • This field is for validation purposes and should be left unchanged.

Join our community and sign up for the Basic Income Today newsletter.

  • This field is for validation purposes and should be left unchanged.