Minimum Income Study Released by Council Budget Office

The Council’s Budget Office examines minimum income programs in its latest Economic and Policy Impact Statement. This new study looks at what it would take to guarantee that every District resident has enough income to afford all their housing, food, health, childcare, transportation, utilities, clothing, and sanitary basic needs (hereafter referred to as “basic needs”).

This is the second such report that the Budget Office issued under District of Columbia Council Rule 308. The prior report focused on the “Universal Paid Leave Amendment Act of 2016” (B21-415).

What Was Studied

  • How much income do D.C. households need to earn to pay for their basic living expenses?
  • Does the District’s social safety net go far enough to support low-income individuals and families who do not earn enough to pay for their basic needs?
  • How could the District ensure that all residents have enough income to meet their basic needs?
  • What would be the impact on the District’s economy, labor market, and budget of providing a minimum income?
  • What other jurisdictions offer a minimum income? What do their programs look like? What impact have they had?

The Study’s Findings

  • The District is a very expensive place to live. Absent any social safety net programs, a single adult would need to earn approximately $36,988 per year to afford their basic needs, a single parent with one child would need to earn about $66,113 per year, and a single parent with two children would have to earn roughly $96,885 per year.
  • The public social safety net provides enough resources for some, but not most, low-income households to meet their basic needs.
  • Ensuring that all households in the District have an income that is at or greater than the Federal Poverty Level would have a relatively small impact on the District’s economy, labor force, and budget. By 2027, it would cause the economy to add 2 to 4% fewer jobs than it might have otherwise. The District would need to spend about $380 million to $710 million a year to provide this income guarantee.
  • Providing cash payments that ensure that all households in the District have enough income to meet all their basic needs would have a substantially negative impact on the District’s economy, labor force, and budget. Paying for a program would require an additional $7 billion to $9.3 billion per year in tax revenue. As a result, residents would hold between 101,000 and 138,000 fewer jobs by 2027 than if the program were not implemented.

Currently, no jurisdiction provides a minimum income to their residents on a permanent basis which is great enough for them to meet all their basic needs. Pilot programs in the U.S. and Canada in the 1960s and 1970s found some evidence that modest cash payments are associated with higher school attendance rates and improved health outcomes. Several cities in California, Canada, the Netherlands, and Finland are currently experimenting with providing a minimum income.

For further information on the Council Budget Office Statement, please see the following documents: