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For one, the plan is badly targeted. Covering the full tuition of all community college students would mean middle-income, and even upper-income, students would get hefty subsidies, even though many do not need the help. Meanwhile, many lower-income students at community colleges would still not have the money to cover the non-tuition costs, such as books, supplies and transportation – and room and board for those not living at home. These costs usually dwarf tuition at a public community college – annual total costs averages over $16,000, while free tuition would account for only about one-fifth of that. True, lower-income students can qualify for Pell grants, but the maximum this year is $5,730, making community college a financial challenge for many, even if tuition were free.

Rather than spend $60 billion to make tuition free to rich and poor alike, a better approach would be to apply an income test and make any new federal program a sliding-scale contribution to total costs.

Warren hopes to spend $1.25 trillion over 10 years to make two- and four-year public colleges free; she would also help students pay for housing, food and books. Sanders would eliminate undergraduate tuition at four-year public institutions by matching each $1 increase in state education spending with $2 from the federal government.

Under these regressive proposals, working-class taxpayers would wind up footing the bill for wealthy students who don’t need taxpayer help. According to the Brookings Institution, the majority of the benefit of eliminating tuition would go to students from the top half of the income distribution. But wealthier students can already pay for their education thanks to a combination of family wealth, work-study opportunities and future earnings from their degrees. Median college student debt at graduation was $29,800 in 2018, and the average worker with a bachelor’s degree earned $33,000 more per year than the average worker with a high school diploma. “Free College For All” would waste tax dollars on students who have no debt or whose debt is manageable. Education experts have voiced these concerns for years, but Warren and Sanders refuse to change tack.

Contrary to their reputation as “progressive,” free college programs overwhelmingly allocate taxpayer dollars toward upper- and upper-middle-class students, giving them a further head start than they already have in the higher education system. The worst offenders are “last dollar” programs (see Appendix for details on types of free college programs), which pay for the tuition balance that remains after all other grants have been applied. Ultimately, that means picking up a bigger check for students who don’t qualify for need-based aid, like a federal Pell Grant. For example, if two students attend college—one a low-income student receiving a Pell Grant and the other a wealthy student not receiving any other financial aid—tax dollars from the free college plan would flow to the wealthy student (who is already more likely to go to college in the first place and be able to afford it) because they will have greater tuition expenses not already covered by existing aid.

This becomes a big problem when you add up all the money being spent on these programs. One analysis of a federal free college proposal found that families from the top half of the income distribution would receive 24% more in dollar value from eliminating tuition than students from the lower half of the income distribution.5 While targeted programs like the Pell Grant were meant to increase access and make college more affordable for low-income students, free college programs would overwhelming direct tax dollars to subsidize the college tuition of those whose income is too high to make them eligible for need-based aid—proving that what sounds like equality does not always provide true equity.

Advocates for individuals with disabilities have promoted a positive version of “Employment First”—made possible only where preexisting disability benefits and supports are assured—which is intended to reduce stigma and segregation by increasing access to competitive labor-market jobs rather than automatically excluding individuals from work opportunities and, through them, greater job prospects and prosperity.142 Crucially, such proposals are not a substitute for disability benefits or support for individuals choosing to work with appropriate accommodations.143 Advocates may quibble over whether any feature should be “first” in a system of individualized supports that are intended to maximize choices around social engagement.144 Arguably, what is prioritized in these programs is each individual’s unconditional and universal entitlement to a full range of possibilities and supports.145 Importantly, Employment First advocates emphasize the need to preserve individual choice and autonomy146—a challenge even with a robust national job market and even for those with the protection of disability benefits. Federal UBI and JG programs at scale would similarly transform the workfare system into a truly productive scheme that rewards—but does not require—work to live. In light of the results of municipal UBI and JG programs, such as Plan Jefes y Jefes de Hogares, SEED, and New York City’s workfare reform, what lessons can be drawn to envision even broader and better approaches and to evaluate their effectiveness given a diverse range of priorities and goals?

A guaranteed income intended to boost the economic security and well-being of recipients while reducing inequality will supplement the existing social safety net rather than replace it. A feature of the social safety net is that many programs are “means-tested” meaning that eligibility for receipt of a particular benefit (such as nutrition or medical assistance) is determined by assessing whether a person or household has the means (income and resources) to meet basic needs without assistance.55 Because of means-testing, any additional income from a guaranteed income program could impact eligibility for other programs. As such, advocates and state decisionmakers should pay careful attention to how an infusion of cash could affect guaranteed income recipients’ eligibility for other means-tested benefits programs such as SNAP, TANF, Medicaid, and housing benefits.

In the long term, in order for a state program to be permanent it must be funded by tax dollars, and those who have more should pay more. Guaranteed income envisions not only a program that provides a basic standard of living for people struggling most, but a program that is redistributive – funded by taxation of people and entities who have the most income and wealth (and the least need) – and distributed to people with the least income and wealth and most need, thus shrinking inequality through equitable revenue raising and redistribution. In order to fund a guaranteed income for its no-income, low-income and middle-income residents, states should examine the full breadth of their revenue raising powers and increase tax burdens on the richest individuals and corporations, and could consider taxing wealth, income, or both. The federal government utilizes a graduated tax rate where income within higher brackets is taxed at a greater percentage than income in lower brackets – generally equating toward those with higher income paying more money in taxes. However, some states have regressive flat income taxes, or no income tax at all, and could consider funding a guaranteed income through implementation of a graduated tax system to more equitably tax the income of high earners in the state.76 For other states, instituting a state wealth tax – perhaps through the form of an estate or inheritance tax – could be a viable strategy for public funding.77

Welfare reform at the national level was inspired by local experiments, including the punitive system first rolled out in New York City by the Giuliani administration.147 But just as the city’s example inspired a nationwide embrace of the 1990s’ negative Work First philosophy, the city’s recent rollback of some of the worst workfare features can and should provide hope for workfare reform that may reduce the stigma of benefits receipt and eliminate unemployment for those seeking work. So long as the trend moves toward expanding and supporting, rather than limiting and punishing participant choices, New York City could model how to make vast improvements in the lives of low-income households, mitigating the racial wealth gap and spreading the social safety net beneath those who need it most.

By the time Mayor de Blasio took charge of city hall after his 2014 campaign to end New York City’s “tale of two cities,”127 the workfare program’s damage was well-documented by advocates, organizers, and legal service providers.128 Over time, advocates succeeded in working with the city’s welfare agency to push for the amendment of certain features of New York’s workfare rules, including statutory protections permitting districts to count at least some four-year-college coursework as a work activity for purposes of receiving subsistence benefits.129 Additionally, the state of New York eliminated the mandatory minimum sanction periods within which an allegedly noncompliant household member would stop receiving benefits.130 Advocates worked with the city agency to reduce the number of work hours required by single parents of young children and to eliminate mandatory workfare placements in unpaid, unproductive “Work Experience Program” positions that offered minimal experience or value to potential employees.131 To obtain federal TANF funds,132 states and local districts remain subject to punitive mandatory work requirements, which continue to stigmatize recipients and trap them in an alternating cycle between low-wage, insecure work and reliance on welfare to meet basic needs.133 Still, as a result of these reforms, New York City was closer than it had been in decades to implementing non-punitive work supports and subsistence-level benefits to all income-eligible households.134

True racial equity will require that generations of racialized harms be met with a sustained commitment to race-conscious solutions. Guaranteed income programs not only provide a platform for a long overdue narrative shift around public benefits recipients, but they could also provide a mechanism to materially reduce racial income disparities by providing higher payments to Black and Indigenous people. In some ways, the racial justice contributions of smaller scale privately-funded guaranteed income demonstrations are easier to conceptualize because some have been explicitly targeted based on race or within historically disadvantaged neighborhoods. However, there has been some examination of how permanent, publicly funded cash transfers programs could be designed to achieve economic justice and racial equity. For example, Dorian Warren’s Universal PLUS model of basic income which “calls for an additional payment to be dispersed to Black families on top of the standard benefits given to all families over a period of time.” As described in a report by the Roosevelt Institute, “The ‘plus model’ acknowledges that the wealth created in the US is inextricably linked to Black labor, sweat, and tears, and this community has never received the benefits created from that labor.” This type of “targeted universalism” recognizes and seeks to redress the negative accumulation resulting from generations of racial inequities in income, wealth, and opportunity.97 Unlike the Universal PLUS model – which would pay some income to everyone and engage in race targeting to provide more income over time to Black families, a guaranteed income would not achieve the same goal of much needed reparations, repairing a history of slavery and race-based exclusion. A guaranteed income program prioritizes channeling money to low-income, no-income, and middle-income people; while there could be additional payments based on the race of eligible individuals, higher income Black and Indigenous people who are entitled to reparations, would not receive a guaranteed income. Racial justice demands that some form of material economic justice be achieved, and there is room for states to think creatively about how a guaranteed income could play a role.

The idea of which I speak goes by the name of “basic income” but is best understood not by name, but by function, and that function is simply to provide a monthly universal starting point located above the poverty line as a new secure foundation for existence. It’s an irrevocable stipend for life. In the U.S. it would be something like $1,000 for every citizen every month. All other income would then be earned as additional income on top of it so that employment would always pay more than unemployment. This may sound overly expensive, but it would save far more than it costs. It would also really only require an additional net transfer of around $900 billion, and that’s without subtracting the existing welfare programs it could replace, and also without simplifying the tax code through the replacement of all the many credits, deductions, and subsidies it could also replace. Basically, we’re already handing out money to everyone, rich and poor alike, but in hundreds of different ways through thousands of government middlemen who only serve to disincentivize employment by removing government supports as a reward for working.

Stern estimates his $1,000 a month UBI plan for every adult would cost between $1.75 trillion and $2.5 trillion per year. A Cato Institute report pegs UBI costs at somewhere between $2 trillion and $3 trillion. The first $1 trillion of that, more conservative UBI advocates argue, should come through eliminating 126 state and federal social assistance programs that currently total about that much. Most of these programs serve low-income people. By contrast, eliminating tax expenditures – think mortgage deductions and other government programs that benefit mostly higher-income people – would bring in about $1.2 trillion. Instituting a European style value-added tax could raise between $650 billion and $1.3 trillion. Another innovative financing approach would be to tie UBI funding to “commons-based revenue” in the same style as the Alaska Permanent Fund, a program that has worked to widely share the benefits from the state’s oil income. This approach could both supplement declining wage income and address natural resource depletion.

These costs must be factored in when looking at the bigger picture of implementing UBI. But this only addresses one part of the problem. The bigger question you ask about how expansive basic income would be can only be answered if we start thinking of different ways to fund basic income. Personally I think the best way to move forward is with a variety of funding mechanisms. This could be progressive taxation, wealth taxes, taxes on financial transactions, consumption taxes and even carbon taxes and a divestment from the prison system; there are many ways to fund this that would not imply framing basic income as a tradeoff. Raising funds will rely on innovative ways to save and divert resources. I believe that basic income is a concrete way to move us towards a more just world with fewer inequalities. In that sense, basic income is often seen as the end, but it should also be viewed as the means to get to a more just tax system and society.

In addition to the belief that people will quit their jobs under a basic income, the idea faces another hurdle: apparent cost. A basic income of $1,000/month for every person in the U.S. would have a gross cost of about $4 trillion a year. A means-tested minimum income guarantee, which phases out as earned income increases above a threshold, could raise incomes by the same amount for perhaps one sixth of the gross cost of a basic income. However, the net cost to the taxpayers is no greater for basic income than for a means-tested minimum income, because the higher taxes some will pay are offset by the basic income they receive. To the extent that the mere fact of “churning”—money going out to everyone, only to be taken back in taxes from some—is an obstacle to political support, the means-tested guaranteed income may be the more politically feasible policy, but it would lose some of the advantages of universal programs.

Conservative Case for a Basic Income The conservative case for a Basic Income centers on two economic propositions: (1) unemployment is caused by imperfections in the labor market; and (2) standard policies (Keynesian) designed to reduce poverty and promote full employment in- stead cause inflation. The best example of the first proposition is James Meade's work [1989]. His argument is as follows. Under the current system, wages are downwardly rigid during recessions. This downward rigidity prevents the labor market from reaching the market clearing price, thus causing mass unemployment. The sources of this rigidity are the rational choices of those who retain their jobs during the economic downturn and the lack of any mechanism for those without jobs to influence the labor market. By partially separating income from work, the incentive of workers to fight against wage reductions is considerably reduced, thus making labor markets more flexible.5 This allows wages, and hence labor costs, to adjust more readily to changing economic conditions. This increased efficiency in the labor market, particularly the responsiveness of wages to conditions of excess labor supply, would lead to full employment and greater economic growth. The second reason conservatives support Basic Income policies stems from Mil- ton Friedman's defense of a negative income tax. Friedman proposed a negative in- come tax as an alternative to Keynesian demand management policies. He argued that Keynesian policies cause inflation and large government bureaucracies, while a Basic Income policy would redistribute income directly to the poor without causing inflation or encouraging big government.6

Conclusions Overall, the limited evidence on the impact of cash transfers on prices suggests a very small, almost negligible, increase in prices. The reason is that the increase in demand is offset by an increase in supply. However, for those goods where producers have greater ability to control prices, price increases are more likely. These results are difficult to extrapolate to a scenario in which a UBI is implemented in an economy, although they point to the idea that the impact on prices depends on the production structure. And also how they are financed: a UBI financed by taxation of higher income and wealth would be a large-scale redistribution, and the increase in the purchasing power of lower income earners can have difficult-to-foresee and far-reaching effects. The increase in demand seems clear, but what is less clear is how it would change the productive supply. If the latter is adapted to the former, prices would not increase. The time dimension is also important. Demand reacts almost instantaneously, while the production structure changes more slowly and gradually. This could generate temporary price effects. The simple relationship according to which the increase in disposable income of a large part of the population will generate a generalised increase in prices per se, does not seem realistic. On the other hand, and finally, it should be noted that the UBI is not an economic policy aimed at controlling and/or regulating prices. The UBI is not a panacea that solves everything: its purpose is to guarantee people's material existence. The problems caused by price increases across the board or in specific markets such as housing or energy, which are current today, would continue to exist with a UBI. They could be more or less intensified by the increase in people's income, but the structural problems that generate them would continue. Therefore, while it is necessary to contemplate the effects of a UBI on prices, one must also be clear about its purpose, and be clear that targeted tools are needed to address other issues.

On the other hand, what can be found in the academic literature on the empirical evidence of the price effects of a UBI? A UBI as such has never been implemented anywhere, so there is no empirical information on what would happen in this case, it is an unknown. However, some papers have analysed the price effect of monetary transfers. Cunha et al. (2019) assess the effect on prices of in-kind and cash transfers under the Programa de Apoyo Alimentario (Food Support Programme) in Mexico. Their results show how prices are reduced by in-kind transfers, as supply increases. In contrast, monetary transfers have a positive, but very small, effect on prices. The authors argue that the small effect is due to the fact that the increase in demand is offset by an increase in supply that makes the increase in prices almost negligible. They point out that the effect on prices is most relevant in the most isolated and poorest villages. This could be explained by the fact that the product markets in these villages are very closed and there is little competition between local producers, so the demand effect outweighs the effect of increased competition. Egger et al. (2021) analysed the individual and aggregate economic impacts of a $1,000 transfer to households in rural Kenya under the NGO GiveDirectly's income transfer programme. They find statistically significant positive effects on local prices, but economically negligible at less than 1%. Filmer et al. (2018) studied the price impact of the Pantawid Pamilya Pilipino cash transfer programme in the Philippines. They analysed price developments in locally traded perishable foodstuffs and in staple and packaged foods traded in national markets. They note that prices increase for the former, i.e., those dependent on the local market. The results are along the lines of suggesting that price effects depend on the production structure, and that in an open economy the demand effect, which would push prices up, is offset by the effect of competition, which would push prices down. While an implementation of UBI has not happened anywhere, and therefore no evidence is available, there are some natural experiments that are slightly similar and may provide relevant information. This is the case in Alaska, where since 1982 the government has distributed a monetary amount to all citizens from the yield of an investment fund financed by the resources obtained from oil extraction (Alaska Permanent Fund Dividend). In 2021, the dividend per individual was $1,114, which, while not a basic amount for subsistence, can be significant. No causal analysis has been conducted to observe the price impact of this dividend, although the historical inflation series for Alaska compared to the United States suggests that there have been no significant effects. The graph below shows how the evolution of the general price index for the state of Alaska in the period 1960-1982 was similar to, and always slightly below, the evolution of the price index for the country as a whole. Since 1982, when the Alaska Permanent Fund Dividend payments began, similar behaviour has been observed and the price level in Alaska has always been below the level of the index for the United States as a whole.

One of the most recurrent concerns in the debates on the implementation of a Universal Basic Income (UBI) is the effect it could have on prices, so that the increase in people's disposable income thanks to the UBI could be partially neutralised by a generalised increase in the prices of goods and services. This is reflected in one of the major internet search engines: if you write "would universal basic income" the first suggestion is "would universal basic income cause inflation" (Miller, 2021). It is often argued that prices will rise because the UBI is understood as an injection of money into the economy, similar to Milton Friedman's "helicopter money", i.e., as if the Central Bank increased the money supply to finance the measure. On the other hand, it is also argued that if there is a generalised increase in income, regardless of how it is financed, producers could anticipate this increase and raise prices across the board. If the issue is to analyse the effects that a UBI could have on prices, the design of the UBI must be taken into account first and foremost. If the UBI is financed by taxes, it is not a monetary injection into the economy, but a redistribution of existing money. The main UBI proposals call for an increase in taxation of the richest population to finance it, and would therefore be a predistributive income measure, rather than an injection of money into the economy.

The idea that a Universal Basic Income fuels inflation makes no economic sense. We live in an age of crisis. The Global Financial Crisis, austerity measures, climate change, Covid-19 and war have all reduced people’s standard of living, wellbeing and even predicted lifespan. It’s a dire outlook, made worse by a fast-evolving cost of living crisis. One way to ease the burden on people would be a Universal Basic Income. In our last age of crisis, during WWII, Western governments took the momentous decision to tackle even more serious crises through massive state intervention. Governments rapidly committed themselves to costs with few precedents in creating social security systems, healthcare systems, nationalised industry and a range of other equality-promoting measures. At a time in which countries could, apparently, least afford those policies, policymakers saw no alternative than to spend big. The consequence was three decades of growth, increased standards of living, increased life expectancy and unprecedented technological development, ended only by war-induced increases in energy prices that sent inflation spiralling. As the Financial Times recently noted, the policies adopted over the past four decades have left countries such as Britain poor, but with some very rich people. Universal Basic Income has been presented as a means of addressing this crisis. Giving people largely unconditional, predictable forms of income to satisfy their basic needs has been identified as means of restoring social security, increasing equality and supporting growth in areas of countries that have been left behind by development and promoting public health overall. There is, however, widespread belief that any monetary intervention stimulates hyper-inflation of the form found in 1920s Germany, 1990s Argentina and 2000s Zimbabwe. This is because people believe that giving consumers more money to spend leads to businesses charging higher prices to take advantage of increased purchasing power, creating a cycle in which employees demand higher wages to buy commodities, increasing the cost of production, cancelling out any benefit from the monetary intervention and actually reducing the standard of living overall. There is little evidence to support this view. UBI is no more or less inflationary than anything else that raises incomes – its impact would depend on whether the economy is at full employment, whether taxes are raised to pay for the scheme and various other factors. Where hyperinflation has occurred, it has occurred because essential goods are scarce, raising their value overall, and debt has been held in foreign currencies and paid in currencies declining in value by virtue of countries’ domestic production being disrupted or declining. Our current levels of inflation are caused by similar pressures as those in the 1970s: war leading to an increase in the cost of fossil fuels. If the logic behind objecting to a UBI on the basis of inflation were correct, then there ought to be absolutely no attempt to introduce new jobs or increase wages, since both increase purchasing power. If inflation is our sole concern, governments ought to slash wages and massively increase taxes. The point is that nobody wants either of those options because, even if they did reduce inflation, people would not want to have their wages reduced. UBI is a redistributive economic policy that can be funded by taxing those resources that contribute little to society: wealth and passive income from shares as well as income at the very top end of society. The resources of the rich are generally off-shored and contribute little to a country’s financial wellbeing. Analysis of the distributive impacts of UBI in the UK suggest its introduction would shift resources to those people and areas that need the investment most. That may increase the cost of housing and other goods in parts of countries that have been left behind, but this is a central means of enhancing community wealth and ‘Levelling Up’. It is also a means of developing entrepreneurship and production within areas that have been deindustrialised. This support for production is, again, an essential means of supporting a bulwark against hyperinflation.

But a UBI would not discourage work to an extent that would undermine the economy. People would still need to work to afford most consumer goods and luxuries. And unlike minimum wage requirements, touted by Fight for $15 activists, a UBI neither raises the cost of employing low-income workers relative to other workers nor disproportionately burdens employers to provide a decent standard of living for people in their communities. With an even starting ground, the opportunities to move beyond the lowest-paying work could be more readily available to marginalized workers who’ve been left out for too long.

CONCLUSION Guaranteed basic income greatly reduces the need in communities and allows citizens to gain individual agency and make choices about their spending. By putting cash directly into people’s pockets we can combat income inequality and racial and generational poverty in the Connecticut area. Many lessons can be learned from both local and national basic income advocates that will help CWEALF advance similar programs. Advocates warned against opponents’ use of coded racist language explaining that much opposition to basic income programs is rooted in racial and economic discrimination. Furthermore, advocates recommend that programs focus on achieving individual agency and personal choice, a lesson proven in the research-based findings from various pilot programs. Recipients in three separate pilot programs reported increased individual agency and decision-making abilities. Finally, advocates urged that there is no better time to advocate for GBI programs as the pandemic has changed the dialogue around GBI and UBI. This is due in part to the high levels of unemployment and the stimulus checks that occurred as a result of COVID-19. In addition, there is much to be learned from recent initiatives for guaranteed or universal basic income in the US. These pilot programs have shown many positive research-based findings including increased mental and physical health. Decrease in unemployment and increase in civil and familial participation. These outcomes show that GBI will increase women’s opportunities to accumulate wealth, improve family health, and reduce reliance on other governmental programs. The fight for GBI is an important one in the state of Connecticut and CWEALF as an organization. Connecticut has one of the largest income inequalities in the country. Specifically, Hartford and New Haven have major issues in generational poverty (and compared to overall wealth in-state). More cash in people’s pockets keeps families financially secure and stimulates the local economy. Furthermore, GBI could reduce the racial income gap and finally bring many black families and individuals above the poverty line.