Guaranteed Income

The Power of Cash: How Guaranteed Income Can Strengthen Worker Power

05. 01. 2023

Evidence points to the significant potential of guaranteed income to rebalance power towards workers.

Executive Summary

For too long, the scales of power have been weighted in favor of corporations and against working people, leading to decades of declines in workers’ share of profits, and in their rights and agency. Yet in the midst of a global pandemic with catastrophic and inequitable losses, workers fought back. We saw thousands of workers take the risk to strike, unionize, or switch jobs to demand more from employers, for themselves, and for their coworkers.

While some theorize the global pandemic and the resulting onset of a tight labor market gave rise to the surge of labor actions, we posit that another factor may also be at play: the federal government’s unprecedented fiscal response, which provided workers with a relative economic cushion, giving them space to take risks and make demands.

In this report, we assess how the federal government’s $931 billion fiscal response points the way to a permanent tool to boost worker power: a federal guaranteed income, or a direct public cash investment without attached obligations, arriving on a predictable monthly basis. We explore the potential of guaranteed income to boost worker power, by analyzing findings from U.S. guaranteed income pilots, from federal pandemic cash policies, and from other available research. We also listen to what workers themselves say about how cash affects their agency over their work lives and their ability to exercise their power in the economy, and weave their stories throughout the report.

Lessons Learned

  1. Workers can have power and agency over their work with guaranteed income.
    Research strongly suggests guaranteed income can provide economic security for workers to take greater risks and find better jobs. Guaranteed income may also encourage more workers to organize. As the experiences of unionizing workers in St. Louis and other research indicate, equipping people with recurring cash can mitigate the risk of losing income, which is a critical barrier for many to join the labor movement.
  2. Workers receiving recurring, unrestricted cash embrace entrepreneurship.
    Several workers shared that they leveraged guaranteed income and/or the expanded Child Tax Credit to start their own businesses, allowing them to have greater agency over their work.
  3. Direct cash reduces child poverty, not employment.
    Expanding cash benefits like the Child Tax Credit, Unemployment Insurance, and stimulus checks, paired with other public benefits, improved child nutrition and significantly reduced poverty, especially among children of color, while having no discernible negative impact on employment.
  4. Direct cash payments support the care economy.
    Because of unrestricted cash payments, more people are able to care for loved ones, volunteer in their community, and engage in other forms of critical unpaid labor.

Although more research should be done to strengthen the link between guaranteed income and worker power, especially as pertains to collective forms of power, current evidence points to the significant potential of guaranteed income to rebalance power towards workers.

Advocates, legislators, researchers, and community- based organizations have already been laying the groundwork for guaranteed income by moving to modernize and expand the Earned Income Tax Credit and state Child Tax Credits, and to scale up guaranteed income pilots to become local and state policies. As our country shifts from emergency to structural response, we call on leaders in labor, guaranteed income, and economic and racial justice movements to absorb the findings of this report on the connection between guaranteed income and worker power, and to work in tandem to advance a guaranteed income that boosts the agency of workers and builds an economy that works for everyone.

Exploring the Role of Cash In Strengthening Worker Power

In November 2022, thousands of workers across the United States were on strike, including 48,000 academic workers at the University of California, 2,000 Starbucks workers, 250 workers at HarperCollins, and 900 coal miners in Alabama who passed 600 days on strike (Toohey, 2022; Fickenscher, 2022; Demopoulos, 2022; Bisaha, 2022). Thousands more exerted their power by organizing their workplaces or leaving their jobs to find better-paying ones. Some theorize the global COVID-19 pandemic in 2020, which contributed to the onset of the tight labor market in 2021, were the main drivers of these mass labor actions (Shierholz et al., 2022; Gurley, 2022; U.S. Department of Labor, 2022).

We posit that another factor may have provided workers with additional support to exercise power in the labor market: the relative economic cushion provided by the federal government’s unprecedented fiscal response. From 2020-2022, the federal government distributed $931 billion in unrestricted cash payments to all but the wealthiest households (U.S. Government Accountability Office, 2022). In this report, we explore how the effects of this cash support point to how a guaranteed income, or recurring, unrestricted cash with no strings attached, can bolster workers’ sense of economic security, allowing workers to take risks and demand more from employers.

The report delves into several areas that shed light on how guaranteed income can strengthen worker power:

  • We first examine the disproportionate impacts of the pandemic on workers.
  • We then document the ways in which workers exerted their power in the labor market despite suffering these disproportionate impacts.
  • Next, we explore the available research to see how federal cash programs, guaranteed income pilots, and other research may have led to this pandemic- era expression of worker power, and could go on to build worker power in the future, if provided in the form of guaranteed income.
  • In closing, we provide policy and research recommendations to advance a federal guaranteed income policy that can boost worker power and build an economy that works for all.
  • Throughout the report, we share stories from workers on how they navigated the labor market during an economic crisis, and on the role guaranteed income played in fortifying their agency and power.

Click here to download the full report.