Basic Income: 4 Things to Know

Basic income initiatives are being implemented across the U.S. as a solution to reduce poverty and improve well-being, including UpLift – The Central Iowa Basic Income Pilot. As awareness of these models increases and related policies are proposed, it is important to foster a shared understanding of the concept and why various basic income models are being elevated.

The Center for Guaranteed Income Research was established in 2020 at the School of Social Policy and Practice at the University of Pennsylvania to develop a common body of knowledge on unconditional cash transfers that can inform policy and practice decisions at local, state, and federal levels. As the team has engaged in research, evaluation, and design of pilot projects, it also has worked to build collective knowledge of this approach. UpLift – The Central Iowa Basic Income Pilot is the 32nd project the Center has been involved in developing.

As we watch the UpLift pilot unfold, we’ve gathered four key insights from the Center and other groups who are leading conversations about basic income as a poverty-reduction strategy.

1. Different Definitions

Basic income is an approach where individuals receive a regular, unrestricted cash payment, allowing people to use the money they receive as they’d like. While universal basic income provides this benefit to everyone, guaranteed basic income provides it to a defined group of people.

“The idea behind guaranteed income is really based on the thought that people are experts of their own lives and they know best where they can leverage that money to help smooth income volatility and help their family achieve upward mobility,” said Dr. Amy Castro Baker, an assistant professor in the University of Pennsylvania’s School of Social Policy & Practice in a PennToday article.

2. Bipartisan History

The idea of a basic income has been suggested throughout U.S. history and only recently implemented across the nation.

In the 1790s, American political activist Thomas Paine proposed providing a lump sum of money to all adult citizens. During the civil rights movement of the 1960s, activists discussed guaranteed income as a way of addressing widespread unemployment and poverty among low-income Americans.

Dr. Martin Luther King Jr. wrote in the book, Where Do We Go From Here: Chaos or Community?, the following widely shared statement:  "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."

In 1969, President Richard Nixon proposed a basic income for low-income families as part of his Family Assistance Plan that never passed in the Senate. Feminist leaders also proposed the model in the 1970s to address income inequality between genders.  

3. Recent Popularity

In recent years, guaranteed income has become an increasingly popular policy solution to address poverty, especially inequality in wealth and income. In 2019, The Stockton Economic Empowerment Demonstration (SEED) was the first mayor-led guaranteed income project in the U.S that provided 125 randomly selected residents with a basic income of $500 per month for two years. Shortly after, the The Magnolia Mother’s Trust launched, providing low-income Black mothers in Jackson, Mississippi with $1,000 in cash monthly for 12 months to address maternal health disparities disproportionately impacting Black women. Both projects demonstrated positive impacts on people’s health and financial well-being, spurring additional initiatives in other communities.

Basic income models also have had positive outcomes with children’s health. The Baby’s First Year Study examined the impact of low-income mothers with newborns receiving a $333 monthly income. Findings showed that babies in families receiving a basic income had faster brain activity in a pattern associated with learning and development at later stages.  

4. Essential Needs Spending

As basic income pilots are rigorously evaluated, researchers are learning that the dollars are overwhelmingly used to meet people's essential needs.

According to The Guaranteed Income Pilots Dashboard, compiling data from more than 30 guaranteed income pilots across the U.S., the largest share of people’s basic income expenditures went toward retail sales and services (42%), followed by food and groceries (28%), transport-related expenses (9%), housing and utilities (9%), financial transactions (5%), and travel/leisure/entertainment (4%). Health care, education, and miscellaneous expenses made up the remaining amount.

Learn More

Central Iowa launched its own basic income pilot in February 2023, supporting low-income individuals with $500 monthly payments over two years. To prepare for the launch, Mid-Iowa Health Foundation gathered resources that explain how this approach is expanding and impacting people’s well-being.