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States Should Protect Guaranteed Income Initiatives and Other Unrestricted Cash Programs

States should listen to the research and to people with the lived expertise of making a limited income work for their families: both say guaranteed income programs that provide cash to households with low incomes are a powerful mechanism to deal with financial hardship and build a strong economic foundation for the future. What states shouldn’t do is prohibit these programs, an unfortunate trend in some states and a position put forward by the conservative Foundation for Government Accountability (FGA).

Bills to preempt local governance and to prohibit these successful guaranteed income (GI) programs are either under consideration or in place in nine states. This is misguided. These programs have the potential to improve the economic security of families, and localities should have the flexibility they need to implement them given the growing body of evidence that GI pilots are helping individuals and families with low incomes meet basic needs like housing, food, and child care.

Direct cash assistance, like that provided by GI initiatives, provides necessary and transformative aid. Findings from a randomized controlled trial of one pilot show that access to cash improves families’ emotional, financial, and psychological health. GI programs are based on the idea, and repeated recommendations from people who have the lived expertise of making the most of low incomes, that increasing financial capacity through cash with limited restrictions allows individuals to access material needs that benefit their families and communities.

In recent years, GI pilots have emerged with different designs, though all feature cash aid with few if any restrictions. For example, RxKids, a novel public-private partnership in Flint, Michigan, provides monthly payments for the first year to the families of all children born in Flint. Said one mother already working two jobs, at more than full time: “I shouldn't have to think about choosing between are the lights going to be on or am I going to make sure the car brakes are good” — the kind of choice she hopes the program will make unnecessary.

Direct cash assistance is proving to decrease time scarcity by increasing the amount of time one can spend on oneself, and with family and the larger community, thanks to time not spent scrambling to pay bills and meet other needs. Notably, that extra time is not coming from reduced employment. GI program analyses have found no significant reductions, and even some evidence of increases, in employment.

Describing this “freedom from [the] constant preoccupation with scarcity,” a report on the Stockton Economic Empowerment Demonstration in California (the randomized trial cited above) described participants having more time to “use [their] imagination, decorate, take time with cleaning,” and “participate in American life in ways they would be unable to otherwise.”

Since 2022, the Denver Basic Income Project has been serving people experiencing homelessness by distributing unconditional cash payments. An interim report of the program finds that income and access to safe, stable housing are critical health determinants, and that the introduction of cash assistance reduced the number of nights that participants spent unsheltered as compared to their experience prior to receiving the benefit.

The Magnolia Mother’s Trust in Jackson, Mississippi, one of the country’s longest-running guaranteed income programs, has distributed over $3 million in direct cash transfer payments to over 230 women. Employment among program participants rose from 28 percent to 45 percent. And participants stated that the payments provided a “brief respite” from the mental and physical challenges that accompany being a Black mother living in poverty. Systemic racism and the intersectional anti-Black discrimination that affects Black women in particular mean that many Black women face enormous barriers to economic security, including inequities in hourly and annual pay and higher rates of living in communities subjected to disinvestment, with under-resourced and devalued properties.

But guaranteed income proposals that might disrupt this dynamic are now threatened by anti-GI bills, which mirror recommendations by FGA. FGA has a number of policy proposals related to economic and health security programs, including recommendations to cut their funding and to take health, food, and income assistance away by imposing work requirements or otherwise restricting who is eligible for help. Its recommendations are also reflected in efforts in a number of states to scale back child labor protections and create extreme barriers to citizen-led ballot initiatives.

This year, bills to prohibit counties and localities from operating guaranteed income programs are being considered in Arizona, Illinois, Iowa, Mississippi, West Virginia, and Wisconsin. Unfortunately, Arkansas implemented its ban in 2023, and South Dakota and Idaho have already enacted bans this year. These bills are part of a worrying trend of preempting local governments from determining what’s best for their communities and allowing important research into new ideas, tested through pilots, to move forward that could help future efforts to redesign social programs so they are more effective. This is similar to steps some states have made to prohibit localities from creating a higher minimum wage or creating paid leave programs. Prohibitions such as these tie the hands of local policymakers and limit the tools available to them to determine how best to serve their communities.

CBPP Research Associate Victoria Bowden contributed to the writing of this post and conducting research on guaranteed income initiatives.