California just agreed to send up to $1,000 monthly checks to residents in nation’s first guaranteed income program

A person holding a $100 bill.
California lawmakers on Thursday approved a guaranteed-income program for residents. Reuters/Beawiharta
  • California lawmakers on Thursday approved a program to provide monthly checks to residents.
  • The guaranteed-income program would prioritize pregnant people and those aging out of the foster system.
  • The state is the first to implement this type of program, which many Democrats have pushed for.
  • See more stories on Insider’s business page.

In the first-of-its-kind state initiative, California lawmakers just approved a program to distribute monthly checks to residents, marking a step toward a universal basic income in the country.

On Thursday, California’s Legislature unanimously approved a $35 million guaranteed-income program, funded by taxpayer dollars, in which residents can receive monthly checks of up to $1,000. The text of the bill says the program would prioritize residents who age out of the foster system and pregnant people. It does not contain restrictions for spending the monthly payments.

“I’d like to thank my colleagues for partnering with me on this important work and investing in this concept that will uplift the lives of so many,” state Sen. Dave Cortese, who advocated the program, said in a statement. “I’m excited that 40 million Californians will now get a chance to see how guaranteed income works in their own communities.”

Cortese added that this program was modeled after a successful universal-basic-income program in Santa Clara County last year that offered $1,000 monthly checks for a year to young adults who were no longer eligible for foster care.

The program directs the California Department of Social Services to administer the funds equitably for both rural and urban applicants. The bill heads to Gov. Gavin Newsom’s desk for approval.

The idea of a universal basic income is becoming increasingly popular. After the pandemic spurred Congress to approve three stimulus checks for Americans, some Democrats called to continue those checks well beyond the end of the pandemic.

In late March, amid infrastructure negotiations, 21 Democratic senators urged President Joe Biden in a letter to include recurring direct payments in his infrastructure plan, saying that when checks ran out after the CARES Act, poverty rose.

A report from the Economic Security Project in April found that fourth and fifth rounds of stimulus checks could cut the number of Americans in poverty in 2021 to 16 million from 44 million while helping close imbalances in poverty, income, and wealth between white Americans and Americans of color.

Biden has not said whether recurring direct payments will become a reality, but California might have paved the way for other states and amplified Democrats’ calls to give residents guaranteed monthly payments.