What Is UBI? (Universal Basic Income)

Universal basic income (UBI) is a governmental public program that can be implemented at the local, regional, or national level that would guarantee all citizens sufficient income to meet their basic needs.

The goal of this type of program is to reduce financial stress faced by the citizens of a country (or region) and enable them to focus on improving their job skills, furthering their education, or managing personal issues while still receiving enough income to meet their basic living expenses.

Because these programs are either experimental or being developed, there is some variance among UBI systems that have been proposed, but the core principles include providing a regular cash payment to every adult citizen, regardless of any conditions, such as employment or income. What follows is a closer look at what we do know about UBI, including the history behind the idea of universal income and the potential pros and cons of UBI.

Has There Ever Been a Guaranteed Income in the US?

The short answer to this question is yes, no, sort of, but mainly no. There have been trials of UBI programs in the U.S. For example, a Mayor-led UBI pilot in Stockton, CA, launched in 2019 called The Stockton Economic Empowerment Demonstration (SEED), giving randomly selected individuals $500 per month for two years, with “no-strings attached.”

The debate over universal basic income also spun up when Andrew Yang proposed the Freedom Dividend, during his campaign for the 2020 Democratic presidential primary, in which he proposed a standard $1,000 monthly payment for Americans.

Yang argued his Freedom Dividend would have increased productivity and boosted economic growth amid the concern that new technologies were putting American jobs at risk. More recently, as worry that the rapid rise of artificial intelligence (AI) could displace jobs in the coming decades, some again point to UBI as a potential way to help stabilize incomes in anticipation of a shift among certain segments of the workforce.

The World Economic Forum’s Future of Jobs Report 2025 estimates that close to 40% of current job skills will be transformed or eliminated by 2030.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

Guaranteed Income Trials in the US

The idea of a universal basic income isn’t new, however, and there’s actually precedent to it: Since 1982 in Alaska, for example, there’s the Permanent Fund, an annual payment that “allows for Alaskans to share in a portion of the state minerals revenue in the form of a dividend to benefit current and future generations.”

A similar program more related to sharing resources is Texas’ Permanent University Fund (PUF). Established in 1876, the PUF utilizes revenue generated by oil and gas companies to fund and support higher education within the state.

A broader, UBI-like program was rolled out in the U.S. during the coronavirus pandemic, when many people lost income because their employers either scaled down or shut down operations. As unemployment skyrocketed, the federal government intervened and added to unemployment benefits to help those in financial distress. The government also implemented a widespread economic stimulus package.

Another example of something akin to UBI is the welfare system, which is government support to help ensure very-low-income citizens can meet their basic needs. However, people lose their eligibility for welfare programs (like food stamps provided by SNAP or Medicaid benefits) if they begin earning more than a certain threshold.

Proponents of UBI or Guaranteed Income in the US

While an argument could be made that welfare is a stepping stone to deploying universal basic income, that hasn’t quite happened yet. This is despite the fact that many have tried. In the 1960s, Martin Luther King, Jr. called for a guaranteed income to abolish poverty and help diminish income inequality among Americans. That same decade, in 1969, President Richard Nixon toyed with a guaranteed income plan to assist poor families by giving them an annual amount, determined by family size and income.

Before Yang revived the idea, the Green Party in 2010 advocated for a universal basic income for “every adult regardless of health, employment, or marital status, in order to minimize government bureaucracy and intrusiveness into people’s lives.” In 2017, Hawaii State Representative (now Senator) Chris Lee published a bill to investigate basic income for his state and explore its viability.

These recommendations are not unique to politicians alone. Facebook Co-Founder Chris Hughes’ 2018 book Fair Shot: Rethinking Inequality and How We Earn argues for a guaranteed income plan providing $500 to working adults in households under a certain income limit, financed by taxes on the top, wealthiest 1% of the country.

More recently, OpenResearch, a nonprofit research group chaired by Sam Altman, CEO of OpenAI, published findings in 2024 of a three-year study, looking at how a payment of $1,000 a month impacted low-income recipients across areas such as employment, health, and agency.

In America alone, UBI has been suggested, debated, and floated as an idea going all the way back to political theorist and revolutionary Thomas Paine in the 18th century, and the publication of the “Agrarian Justice” pamphlet (which is also recognized as the first American proposal for pension plans). “Agrarian Justice,” written in 1795-1796, discussed the origins of property, and that divisions between the poor and the rich were arbitrary ones that should be actively eroded, if not discarded.

But as the above paragraphs suggest, these calls, experiments, and trial balloons flirting with UBI have not resulted in any kind of universal basic income program in the U.S.

Recommended: Guide to Income-Based Student Loan Repayment Plans

What About the Rest of the World?

Since other countries in the world have a longer history than America, it might not be a surprise to learn that the notion of universal basic income does as well. It has emerged and re-emerged throughout history — dating back at least to the 1500s.

In 1516, English philosopher and lawyer Thomas More published Utopia, a satirical book that posited how a minimum income might cure theft. As time went on, these suggestions have gone from being less radical to more seriously considered.

When Thomas Paine wrote about UBI in the 18th century, historians say French military general Napoleon Bonaparte began to open up to the idea of providing a type of basic support to the public.

While Napoleon ultimately never implemented UBI, a good deal of the rest of the world seems to be thinking it’s time to adopt it. Fast-forward to more recent times, and in 2018 British business magnate Sir Richard Branson spoke to the press about the importance of UBI, saying he believes “it will come about one day.”

In Germany, the results of a three-year UBI study called the Basic Income Pilot Project were published in April 2025. Groups in South Africa have made repeated calls for basic income, and political parties and economists in Japan support the idea. While there aren’t any fully implemented national UBI plans currently in practice, there is a growing list of countries that have explored smaller-scale programs to test out the idea.

What Are Some of the Pros and Cons of UBI?

Like anything, UBI has a number of pros and cons. The arguments for and against can be complex, branching into economic and political factors and ideas. This article provides a brief overview of some of the frequently cited pros and cons.

Pros of UBI

Some of the pros of UBI are straightforward — for example, with consistent and reliable payments from the program, people could choose to learn new skills and pursue jobs they enjoy or those that offer more competitive wages, reducing financial anxiety.

Another pro — with this safety net, people would also be better able to take time off of work to care for a family member, should the need arise.

Proponents of UBI say that governments may spend less to administer UBI in comparison to traditional welfare plans. And UBI could help in ending the cycle of poverty that some people on welfare find themselves trapped in.

Another benefit? UBI payments have the potential to help stabilize the economy during a recession.

Cons of UBI

UBI can raise concerns about inflation. People would be receiving payments and feasibly have more money to spend, which could cause inflation if there is an increased demand for goods and services. And, if there is increased inflation, the payments wouldn’t necessarily lead to an increased standard of living.

While proponents of UBI anticipate that the program would be less expensive than the current welfare system, there aren’t many plans that detail what a potential transition from welfare to UBI could look like in the United States.

Some critics worry that other social services could be defunded following the implementation of UBI.

Additionally, there are concerns that UBI could squash people’s motivation to work.

The Takeaway

Universal basic income, or UBI, is the idea that each citizen would receive an unconditional universal basic payment from the government to help meet their basic needs. This idea has been percolating for centuries. Proponents of the idea suggest that the program would offer stability for residents and could potentially cost less to administer than the current welfare system. Detractors of the idea argue that UBI could lead to inflation and disincentivize people from working.

Whatever you may think of the merits of and arguments against universal basic income, it’s anyone’s guess whether it will become a reality in the U.S. In the meantime, you could consider reviewing or making your own financial plan. Being more deliberate about how you earn and spend, and being sure to put some money aside each month for the future can help you create your own personal financial safety net.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What is a simple definition of universal basic income (UBI)?

Universal basic income is a government program that delivers a regular, unconditional cash payment to every citizen within a given population, allowing them to meet their basic needs. These consistent payments are provided without any work or income-level requirements.

What are the main arguments in favor of UBI?

Proponents argue that UBI may reduce poverty and income inequality. By alleviating individuals’ and families’ financial burdens, it could allow them to concentrate on enhancing their job skills, pursuing education, or addressing personal matters, all while maintaining a basic standard of living.

What are the biggest potential downsides of UBI?

Some of the primary concerns about UBI include the cost of implementing such a large-scale program and the logistical challenges of transitioning from welfare to a UBI system. Critics also cite the risk of UBI leading to inflation as consumer spending power increases. Some worry that other public benefits could be defunded as a result of UBI, while others say it might reduce the incentive for some people to work.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

SOBNK-Q225-098