What Guaranteed Income Could Do for Young Americans

Arial Robinson, a 23-year-old multidisciplinary artist who is currently applying for jobs, said she’s struggled with bills since graduating from college. Now, as a freelancer, Arial is often waiting 60 to 90 days to be paid. “The weight of that stress feels like the world is toppling down on you,” she said. “It makes me feel like I am not doing enough.”

According to the Center for Law and Social Policy’s 2023 Youth Data Portrait, the young adult poverty rate increased to 15.3 percent in 2022, the highest since 2017. Though Economic Policy Institute’s class of 2024 report notes that young high-school graduates experienced a “faster rebound” in job prospects and strong wage growth through the pandemic recovery, many young people are grappling with jobs that pay low wages or have inconsistent scheduling, an affordable housing crisis, and student debt. These crises, among others, have shaped coming of age for young people, bringing up questions of what it means to support people during a transitional period of life.

One effort is a proposed tax credit that would create a universal $500 monthly payment, indexed to inflation, for 18- to 24-year-olds. Proposed in March 2024 by Democratic Reps. Morgan McGarvey (KY-03) and Bonnie Watson Coleman (NJ-12), the Young Adult Tax Credit Act is based on a year-long guaranteed income pilot that ran in Louisville, KY, YALift. The legislation has been referred to the House Ways and Means Committee.

For Arial, a guaranteed $500 a month would be beneficial personally and professionally. It would help her invest in work, including paying for editing software or subscriptions, and being able to afford basic needs, like feminine products and soap, or building up her credit. Looking at the political, social, and economic landscape as a young person feels overwhelming, Arial added. “It feels like we are progressing backwards, but the world is telling us it is our responsibility to move forward,” she said. That’s another reason guaranteed income could make a difference. 

What Would the Young Adult Tax Credit Act Do? 

“I can’t tell you how many young adults we’ve met with who are in school or have jobs who struggle every month just to make ends meet,” Rep. McGarvey said, adding that the primary concern of University of Louisville students who visited his D.C. office this spring was student hunger on campus. “We’ve seen the success of this program in Louisville and believe it should be available across the country, so young adults can keep moving forward instead of falling behind.”

Alexis Obinna, New Deal for Youth Changemaker, is one of the young adults who met with Rep. McGarvey’s office to give feedback on the Young Adult Tax Credit Act. Obinna is a former foster youth who explained that in the midst of the pandemic, she was a full-time college student juggling multiple jobs and internships. 

She was also homeless, she said, and in unsafe situations. “People don’t realize being homeless is very expensive,” Obinna said. Being without a refrigerator meant having to essentially eat out every day, and not knowing where her next meal was coming from. Being without a shower meant paying for a gym in order to access one, on top of transportation to get there.

There is this idea that, when someone turns 18, society expects them to know what to do with their lives and where to access resources, Obinna said, but that isn’t the case. “When you’re a young person and you do not have support and you’re navigating things alone, you become an adult who doesn’t have support, who’s still navigating things alone.”

Kathy Tran, Power Building Strategist at the National Collaborative for Transformative Youth Policy, explains that “a lot of people assume that young people have multigenerational family support, but there are so many young people who do not have that support.” In addition, young adults are often parents or caregivers themselves. 

After rates of child poverty in 2021 fell to a historic low thanks to the expansion of the Child Tax Credit, when the expanded CTC expired, it resulted in over 5 million more children living in poverty. As reported by Vox in 2020, some young people were not eligible for stimulus checks due to tax filing status as a dependent, leaving them out of temporary economic support provided through the CARES Act.

With the Young Adult Tax Credit Act, young adults have to be tax filers, Tran added, meaning they’ll be encouraged to open a bank account, which supports establishing financial management skills. Tran explained that a guaranteed universal income also correlates with guaranteed economic opportunity that the National Collaborative for Transformative Youth Policy envisions where every young person who wants to work a job has job training, a skill program, an apprenticeship, or subsidized employment. “Young people want to work, but they want to work fulfilling jobs that see them as humans,” she said.

Impacts of Guaranteed Income Are Far-Reaching

A 2023 report from the Economic Security Project detailed how direct cash payments impact worker power, providing security for workers to take risks and find better jobs. It’s one example of how guaranteed income could support young people’s agency. 

Universal basic income is not new, and as reported by The Washington Post, it has been tested and proven repeatedly. (According to the Economic Security Project, universal basic income is a regular cash payment to all members of a community, guaranteed income can be targeted or universal, focusing on prioritizing those who have the greatest need.)

The Economic Security Project and Mayors for a Guaranteed Income’s polling from 2023 shows that a majority of Americans support guaranteed income. There are 154 pilot programs and counting as of 2022 said Shafeka Hashash, Associate Director of Guaranteed Income at the Economic Security Project. “Beyond just what guaranteed income provides for families, I think people don’t realize the community aspect that it gives, because you’re stabilizing folks, which in turn is stabilizing a community,” she added. 

In July 2024, results of one of the largest studies of guaranteed income programs were published in the National Bureau of Economic Research, noting that recipients increased spending on basic needs. As reported by Chabeli Carrazana for The 19th, some participants were able to to move from several jobs to one, or start businesses. 

In reporting for Teen Vogue in 2022, Jacqui Germain spoke to young people participating in guaranteed income pilot programs, detailing the impact of cash payments and noting that some pilots are targeted toward specific demographic groups, including new mothers or formerly incarcerated people. Coverage of guaranteed income pilot programs in Los Angeles and Oakland from Cal Matters notes that participants felt they gained more time with their children. A study of a guaranteed income pilot in St. Paul, MN, showed that the number of people employed increased from 49 percent at the start of the program to 63 percent six months after the program ended. Other reports show that outcomes of guaranteed income pilots include gains in mental and physical health, increases in food security and housing stability, and enhanced quality of life. 

How can young people be impacted by guaranteed income? 

Meanwhile, a 2023 report from the Center for the Study of Social Policy noted that an unrestricted cash benefit can not only help young people meet basic needs, but “enable them to participate more fully in the social, civic, and economic life of their communities—activities that economic insecurity can inhibit.”

Melanie Jimenez Perez, program manager for Santa Clara County’s guaranteed income pilot program focused on former foster youth, saw the impact firsthand. Many young people were parents, or assumed a caregiving role for siblings in the foster care system, and used the money to keep a roof over their heads, she said. Perez said some were able to stop working three jobs, and focus on what educational or workforce opportunities felt meaningful to them. “I think the guaranteed support at this intersection [of] their life is critical because it allows them to make decisions based on what is in their best interest long-term,” continued Perez.  

The second cohort launched in August 2023, with participants receiving $1,200 a month. Perez said that, often, when people look at government programs, they want to know whether young people are working or in school. Instead, they prioritize trust, so young people will share what they need to improve their quality of life.  “We want to know, do they feel secure? Are they taken care of? What’s next for them?” Perez said.

The impact of financial support can be expansive. Prior to her current role, Hashash worked for a coalition against domestic violence, and said that guaranteed income can provide the ability for a young person to leave an unsafe situation. “I think there are so many big effects, not just the obvious of being able to afford basic needs,” Hashash continued. “But to also have the independence to really self-advance in a way that makes sense for them.”

Fiona, an 18-year-old high-school student, hadn’t previously heard of the Young Adult Tax Credit Act, but said she’d use the word “life-changing” to describe how impactful it would be for her family. Fiona and her mother are domestic violence survivors and live in affordable housing, she said, and her mother is disabled. Her mother “works and works and works,” Fiona explained, and more financial assistance would be helpful. They received notice that they’d been enrolled in a rental assistance program, a second phase of her state’s COVID Emergency Response Program. But additional assistance has typically felt like a “temporary thing,”said Fiona, either because eligibility becomes more restrictive or programs run out of funding, Fiona explained. It means she and her mother live with their heads above the water. “Sometimes we get pushed up above the water—we’re able to breathe,” she said. “But we’re always, always, always on the edge of just completely sinking, or sometimes even just getting pulled down.” 

A monthly credit feels more consistent. She’d be eligible for six years of payments if it were to begin now, and she’d want the bulk to go toward rent and potentially college. Fiona also believes it could change young people’s perspective on the government overall. “If a monthly tax credit is possible, then what else is possible?” she said.

Young adults continue to experience gaps in the social safety net, despite this stretch being considered the second most critical developmental period after early childhood. “Being this age kind of feels like you’re going through puberty again—you don’t know exactly what you want to do, or if you do, you may be doubting yourself,” said Arial about why $500 a month would be impactful. “So having that extra security to make choices and be confident in making choices and taking risks is important.”