The rise and fall of guaranteed income
Falling from favor
“If the Senate fails to act this year,” Senator Abraham Ribicoff (D-Conn.) told his fellow legislators in September 1972, “it is unlikely that the Congress will consider welfare reform at all in the next Congress, after years of fruitless effort already devoted to this subject. The tragedy of this failure will be more than a political one. It will be a human failure — a failure to help millions of Americans who subsist in poverty.”
Sen. Ribicoff’s sense of the politics was correct and a few days later, his final effort to pass the FAP failed, marking the highpoint for guaranteed annual income in the United States. Amidst calls for his impeachment, Nixon officially dropped the plan in his 1974 State of the Union speech. He resigned that August.
Beginning in the mid-1970s, a number of rapid political and economic changes wracked the U.S. Oil shocks, high inflation, and unemployment each challenged the assumptions of abundance that helped provide political space for pro-GAI arguments. In the mist of this economic and psychological turmoil, the values that had nourished support for the GAI — rooted in a sense of mutual rights and obligations between the country and all its citizens — began to be supplanted by those that emphasized the overriding importance of unfettered markets and individual gain.
Though President Jimmy Carter did revive another very moderate GAI scheme as part of his “Program for Better Jobs and Income” in 1977, the plan never got out of congressional committee. Other changes during the Carter Administration, however, including the deregulation of commercial aviation and trucking as well as the backing away from national health insurance and full employment programs, presaged a sea change.
The decline in support for guaranteed income “is in many ways reflective of the bigger story of the changes in values” in America, said Michael Katz, of the University of Pennsylvania. “[Guaranteed income] was a victim of a much larger paradigm shift that affected every sphere of society.”
By Ronald Reagan’s election in 1980, the country in which GAI had seemed mainstream a decade earlier looked considerably different.
GAI in action: the results of field experiments
As the guaranteed annual income idea became more prominent and its eventual enactment into legislation looked plausible, legislators and policy analysts — both critics and supporters — realized they had little data to go on regarding the prospective impact of GAI on recipients of assistance and on American society. Beginning in 1968, then, the federal government undertook a series of four “negative income tax” (NIT) experiments that sought to quantify the consequences of a guaranteed income by assigning randomly selected poor families to various guaranteed income levels and tax rates, and others to control groups. The largest of these experiments ran in Seattle and Denver from 1971 to 1982 and involved some 4,800 families.
“Part of the social experiment was actually pretty narrowly construed to see at what point does giving people a guaranteed income become a work disincentive. They really honed in on that problem,” Alice O’Connor, professor of history at the University of California, Santa Barbara, told Remapping Debate. Indeed, as the New York Times reported on the eve of the first experiment, in New Jersey, “the ultimate objective of the program is to find out such things as whether a guaranteed income actually pushes more people into jobs; whether subsidized families stay together and whether they seek better housing.”
Ahead of the experiments, many critics of the GAI concept predicted a massive defection from work, a hypothesis derived from the assumption that poverty stemmed from individual “laziness.”
The experiments showed that paid employment effort did indeed decline. In Denver and Seattle, for example, work effort declined by 5 to 10 percent among employed men. For married women the reduction was much larger, 20 to 25 percent; for single mothers, the experiments showed a decline of 10 to 15 percent. But did decline in paid work represent a negative development? Or was it, at least in part, a positive change reflecting participants looking for better jobs, getting more education, or spending more time with family? These questions were neither asked nor answered at any level of detail or precision.
However, the chief data analyst of the Denver experiment was able to firmly rebut those who had predicted that GAI would encourage mere laziness: “The ‘laziness’ contention is just not supported by our findings. There is not anywhere near the mass defection the prophets of doom predicted.”
The results on family stability were more controversial among policymakers and in the press. Rates of marital breakup among families in the NIT experiments jumped 60 percent over control groups. As these results became public in 1978, Senator Daniel P. Moynihan (D-N.Y.) abandoned his support for the plan, exclaiming, “We were wrong about guaranteed income!” Tom Joe, a Carter advisor, came to a different conclusion: “What will you do — starve people to make them stay together?”
Looking back on the scale and scope of the NIT social experiments from the perspective of the present limits of social and political imagination, Alice O’Connor, the historian, commented on the fact that GAI had enough currency for the experiments to be conducted at all: It gets “more amazing with the passage of time,” she said.