California lawmakers just approved the nation’s first guaranteed income program

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  • California lawmakers approved a program that would provide monthly checks to residents.
  • This guaranteed income program will prioritize pregnant people and those aging out of the foster system.
  • The state is the first to implement this type of program, which many Democrats have been pushing for.
  • See more stories on Insider’s business page.

In the first-of-its-kind state initiative, California just approved a program to distribute monthly checks to its residents, marking a step toward a universal basic income in the country.

On Thursday, California’s state legislature unanimously passed a $35 million guaranteed income program funded by taxpayer dollars, in which residents can receive up to $1,000 monthly checks. According to the text of the bill, the program would prioritize residents who age out of the foster system and pregnant individuals, and it does not contain any restrictions on how the monthly payments should be spent.

“I’d like to thank my colleagues for partnering with me on this important work and investing in this concept that will uplift the lives of so many,” California State Senator Dave Cortese, who advocated for the program, said in a statement. “I’m excited that 40 million Californians will now get a chance to see how guaranteed income works in their own communities.”

Cortese added that this program is modeled after a successful universal basic income program passed in Santa Clara County last year, which offered $1,000 monthly checks for a year to young adults who were no longer eligible for foster care.

The California Department of Social Services will administer the funds equitably for both rural and urban applicants, and the bill now heads to California Gov. Gavin Newsom’s desk for approval.

The idea of a universal basic income is becoming increasingly popular. After the pandemic spurred Congress to approve three stimulus checks for Americans, some Democrats began to call for those checks to continue well beyond the end of the pandemic.

On March 31, in the midst of infrastructure negotiations, 21 Democratic senators urged President Joe Biden in a letter to include recurring direct payments in his infrastructure plan, saying that when checks ran out after the CARES Act, poverty rose.

Insider also previously reported that a fourth and fifth stimulus check could cut the number of Americans in poverty in 2021 from 44 million to 16 million while helping close imbalances in poverty, income, and wealth between white Americans and Americans of color.

Biden has not yet commented on if recurring direct payments will become a reality, but California might have paved the way for other states to follow suit and amplified Democrats’ calls to give every resident guaranteed monthly payments.

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Twitter billionaire Jack Dorsey just donated $15 million to fund basic-income pilot projects in at least 9 US cities

Jack Dorsey
Twitter CEO Jack Dorsey.

  • Twitter CEO Jack Dorsey just donated $15 million to Mayors for a Guaranteed Income, a coalition of US mayors interested in starting basic-income pilots. 
  • Several pilots are already underway, including a recent trial in Saint Paul, Minnesota.
  • Dorsey’s investment will help additional cities like Pittsburgh and Los Angeles launch their programs.
  • Visit Business Insider’s homepage for more stories.

Starting in April, millions of Americans received stimulus checks – a no-strings-attached payment meant to alleviate financial hardship. To proponents of a basic-income policy, the idea sounded familiar.

Basic-income programs essentially pay people simply for being alive as a way to alleviate poverty. Michael Tubbs, the mayor of Stockton, California, launched one of the US’s first guaranteed-income pilots – a program called SEED – last year. The experiment has been giving monthly payments of $500 to 125 of the city’s poorest residents since February 2019.

Tubbs also spearheads the group Mayors for a Guaranteed Income, a coalition of mayors interested in starting similar basic-income pilots across the US. In July, the coalition received $3 million from Twitter CEO Jack Dorsey’s #StartSmall initiative to fund global COVID-19 relief. On Tuesday, the group announced that Dorsey is giving another $15 million to support more basic-income pilots. 

Tubbs told Business Insider that he and Dorsey started discussing a plan to promote basic income earlier this year.

“We just had a conversation about where I saw it going,” Tubbs said. “I said, ‘Well, I have a bunch of mayors who I know will sign up for this if we can provide them TA [technical assistance] and support.”

The coalition now has 29 mayors now on board, including Los Angeles Mayor Eric Garcetti, Atlanta Mayor Keisha Lance Bottoms, and Seattle Mayor Jenny Durkan. Every city in the coalition is guaranteed up to $500,000 dollars, Tubbs said.

Several basic-income experiments have launched since the initiative began. Saint Paul, Minnesota, started a pilot this fall to give $500 per month to 150 low-income families for up to 18 months. Richmond, Virginia, is distributing $500 per month to 18 working families. And Compton, California, is giving 800 residents a guaranteed income of between $300 to $600 dollars per month for a two-year period.

Dorsey’s latest investment will help kickstart programs in six more cities: Columbia, South Carolina; Los Angeles, California; Madison, Wisconsin; Pittsburgh, Pennsylvania; Providence, Rhode Island; and Tacoma, Washington. It will also help advance existing pilots in Richmond, Saint Paul, and New Orleans. New Orleans recently began distributing $50 weekly stipends to 10 local students and plans to expand that pilot to adults.  

“He saw the success of just the announcement and how many people signed up and he said, ‘Well, how did we get pilots going?'” Tubbs said of Dorsey. “This is a huge, huge momentum shift. For some mayors, it’s literally the delta between what they needed to start.”

Michael Tubbs
Mayor Michael Tubbs discusses his basic-income program during an interview in Stockton, California.

Replicating Stockton’s success

In its upcoming basic-income pilot, Pittsburgh plans to distribute $500 per month to 200 residents for 24 months. In a Tuesday press call, Mayor Bill Peduto said the recipients will be 100 lower-income families and 100 lower-income families led by Black women. The pilot will investigate how the money reduces racial, gender, and economic disparities. 

Columbia’s program, meanwhile, is expected to distribute $500 per month to 100 Black fathers for 24 months. The payments will be loaded onto a debit card. Mayor Stephen Benjamin said the pilot could launch early next year.

For the most part, the new trials intend to mirror what Tubbs did in Stockton. Data from last year showed that Stockton’s basic-income recipients primarily used the money to buy groceries and pay their bills. Many said it improved their quality of life

“I don’t think I’d be here today if it wasn’t for the SEED program,” Laura Kidd-Plummer, a participant in Stockton’s basic-income pilot, said on the call. She was displaced by a fire in October 2019 and didn’t have a permanent residence until May.

But Tubbs lost his reelection bid in November, meaning the program likely won’t be extended past January. 

“As someone who has always been kind of out there and first and taking risks, those things cost political capital,” Tubbs said. “So much of the game of politics is self-preservation, so to have these mayors take this risk and say, ‘You know what, even if I get backlash, even if people don’t like it, even if I can’t help everyone, even if I could possibly lose reelection, this idea is worth fighting for, and my constituents are worth fighting for,’ it makes me incredibly inspired.”

Pushing for a national basic-income policy 

Tubbs’ long-term goal is to make basic income a national policy

“Our social safety net needs to upgrade from 1935,” he said. “The 21st century New Deal has to be an income floor. COVID-19 has just made that very clear when you look at the impacts on loss of wages, on folks who are unemployed.”

Critics of basic income, however, argue that cash stipends reduce the incentive for people to find jobs and may encourage frivolous purchases. Some consider the idea of monthly stipends too radical, though the origin of basic income dates back to the 16th century.

andrew yang nyc mayor poll
A sign supporting Democratic presidential candidate Andrew Yang’s plan for a monthly universal basic income seen during a rally in New York City’s Washington Square Park.

Tubbs said unemployment insurance and social security were also seen as radical during the New Deal era, but were necessitated by economic crisis. He thinks the same could happen as a result of the current pandemic, though it will depend on politicians’ willingness to reach across the aisle.

No Republican mayor has joined Mayors for a Guaranteed Income yet – and interest in the policy skews heavily Democratic. Former presidential candidate Andrew Yang, a democrat, made basic income a prominent part of his campaign platform, pledging to give $1,000 a month to every adult US citizen over 18.

Tubbs, however, thinks it’s possible to enact national policies that would give the vast majority of Americans an income floor – money that’s guaranteed, no matter how the economy performs.

“If we can’t act in this moment, then I have to question our ability to act, because literally the bottom is out,” Tubbs said. “This is ground zero.”

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