Universal Basic Income Has Been Tried Over and Over Again. It Works Every Time.

As AI becomes a bigger and bigger part of our lives, the threat of job automation becomes an increasing possibility for many people. Lately, there’s been a lot of talk about universal basic income, the experimental form of welfare distribution that gives unconditional cash payments to people so that they can meet their basic needs. Tech billionaires like Sam Altman say they’re big fans of UBI and claim that it could solve the problem of mass job displacement when robots and software take over much of our economy.

Let’s put aside Sam’s visions of a dystopian future; UBI might just be a great idea for our country to try, anyway. There have been many, many UBI pilot programs over the past few decades, and every time they’re conducted, they make the people who receive payments happier and healthier. UBI is an idea with a long history, stretching back decades. Let’s take a quick look back at some of the experiments that have been run and the impact that they’ve had.

Richard Nixon launched a UBI program in 1969 that was tested on a small number of communities. The program was designed to deliver an ongoing, unconditional payment to working families to assist them with their basic needs. Hilariously, one of the people put in charge of these pilots was Donald Rumsfeld, who was working in Nixon’s Office of Economic Opportunity at the time. Rumsfeld also brought on Dick Cheney to help him with the program (later, of course, the duo would go on to disastrously run Bush II’s White House foreign policy team and embroil America in pointless wars).

Fears that the experiment would engender laziness in participants were not borne out in the project’s findings: “The ‘laziness’ contention is just not supported by our findings,” the chief data analyst of one of the experiments said. “There is not anywhere near the mass defection the prophets of doom predicted.”

Due to their success, Nixon’s experiments evolved into broader plans to institute a national UBI that would have delivered as much as $1600 a year to families of four (adjusted for inflation, that’s around $10,000 per family). This was known as the Family Assistance Plan, or FAP, which would’ve used something called a negative income tax to fund the massive new welfare program. Nixon actually introduced comprehensive legislation to institute the program but it was thwarted by political headwinds. The program was eventually canceled. Nixon’s advisors, including, allegedly, Milton Friedman, convinced him not to do it.

The state of Alaska has one of the longest-running and most successful basic income programs in the world. The Alaska Permanent Fund delivers around $1,600 a year to every resident in the state and has done so for the past forty years. It does this by divvying up a certain percentage of the proceeds from surplus revenue derived from one of Alaska’s most vital resources: its oil and gas reserves. This dividend, as it’s called, is then sent unconditionally to state residents on an annual basis. UBI proponents contend that this model—in which a valuable resource is treated as a shared economic asset—is one of the more promising methods by which basic income could be scaled up to provide for a much larger, national system.

During the peak of the covid-19 pandemic, as many as 20 different U.S. cities launched basic income pilots to bolster incomes during a time when job loss and economic downturns were rampant. The programs delivered as much as $1,000 a month to recipients, typically for as long as a full year. Data about the projects was collected by the Stanford Basic Income Lab, which compiled a report that showed the pilots had helped low to middle-income families meet their essential needs. Retail purchases comprised about 36 percent of the spending. Meanwhile, 31 percent of the proceeds went to food and groceries, while housing and transport received 9 percent. The other spending was distributed between things like healthcare, education, and travel.

The Baltimore Young Families Success Fund was launched in 2022 by the city’s mayor with funding from the city, as well as the non-profit CASH Campaign of Maryland. The program, which was designed to cushion the blow from covid-related economic turmoil, has consistently delivered $1,000 a month to 200 participants and, as a result, has invested nearly $5 million in the community. Survey results suggest that participants spend the money on regular essentials, including groceries, car payments, and bills.

While not specifically organized around race, the experiment targeted mostly young, low-paid, African American residents, whose income hovered around $15,000 a year. One 21-year-old mother of two, for instance, said that she was able to afford rent as a result of the cash payment, whereas she had previously struggled to make ends meet.

The city of Stockton, California, began a UBI experiment in 2019 that, by all available metrics, has been a big success. The SEED program, as it’s called, doled out monthly unconditional sums of $500 to 125 low-income participants for two years.

An analysis of the program showed that it helped improve the life experience of the people involved, who felt “healthier, showing less depression and anxiety and enhanced well-being” than people who had not received the funds. The analysis also showed that the extra cash was primarily used to pay for basic needs. Recipients spent the money mostly on food (such purchases comprised between 34-40 percent of the money spent), as well as retail merchandise, car care, utilities, insurance and medical expenses, as well as a very small amount of self-care. Stockton’s program is credited with having inspired other, similar pilot programs in other cities—particularly in California.

In 2017, Finland launched a program to give €560 ($616) a month to 2,000 unemployed citizens. The program, which lasted two years, was designed to replace traditional welfare systems in Finland that put employment-related conditions on cash dispersals. Part of the program’s design was to see whether an unconditional basic income could net better rates of employment in participants than those in a traditional welfare program.

While the program’s results showed that it had a positive emotional impact on participants, it did not markedly improve employment rates for them. As a result, some referred to the experiment as a “failure.” However, the experiment’s results also showed that a “no-strings-attached” basic income did not markedly dissuade recipients from job-seeking or employment behavior. Instead, it stayed roughly the same.

The Compton Pledge was a UBI experiment that, as Time puts it, sought to test whether it could transcend its “status as a small research project in progressive Los Angeles and someday work as a nationwide program funded by taxpayers”. The Pledge calls itself the largest UBI experiment in the U.S. and says it releases “recurring cash relief to low-income residents for 2 years.” Participants interviewed about their experience with the program have noted their ability to pay for a variety of things that would have been out of reach without the program. Others even started businesses or non-profit organizations with the financial assistance that was provided. The program’s final report notes: “Residents used the additional funds to cover costs in times of sickness, start business ventures, and provide stable conditions for their families and communities.” The program was funded partially through private donations.

The world’s largest and longest-running UBI experiment was launched in Kenya in 2016 by the non-profit GiveDirectly. The organization, which doles out unconditional cash transfers to families living in extreme poverty, has committed as much as $30 million to thousands of people throughout Africa. The cash transfers amount to a lump sum of $50 a month for recipients—an amount that can go quite a long way to providing for basic needs. The program plans to continue sending money to recipients for as long as twelve years, making it the longest UBI experiment in existence. A recently published report on GiveDirectly’s efforts has shown that this style of welfare distribution can be much more effective than more traditional forms of distribution in alleviating poverty. Indeed, initial results found that the unconditional cash dispersal did not “disincentivize work” but, instead, made participants more economically resilient and entrepreneurial. The full report on the experiment’s initial findings concludes:

Communities receiving UBI experienced substantial economic expansion—more enterprises, higher revenues, costs, and net revenues—and structural shifts, with the expansion concentrated in the non-agricultural sector. Labor supply did not change overall, but shifted out of wage employment and towards self-employment.