Hawaii's 2017 Basic Income Resolution: What HCR 89 Really Did

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Hawaii’s 2017 Resolution to Study Universal Basic Income

Hawaii did not start paying anyone a universal basic income in 2017. What it did was smaller, and in its own way more interesting: in June of that year both chambers of the state legislature unanimously adopted House Concurrent Resolution 89, which declared that every family in Hawaii deserves basic financial security and asked state agencies to study how that could be guaranteed, including through a full or partial universal basic income (UBI). It was a statement of principle plus a homework assignment, not a benefit program.

That distinction got lost in many headlines at the time, which presented Hawaii as the first state to "pass UBI." Below is what the resolution really said, why a small island state took up the question, how it fits into the long history of basic income ideas, and what the experiments running at the time went on to show.

What HCR 89 said and asked for

A concurrent resolution in Hawaii expresses the view of both the House and the Senate, but it is not signed by the governor and does not carry the force of law. HCR 89 used that format to do two things.

First, it put on record the principle that all families in the state are entitled to basic financial security. Representative Chris Lee of Oahu, who introduced it, said on Reddit that he had wanted to "start a conversation about our future," and he announced the outcome on Twitter:

Hawaii first state to declare everyone deserves basic financial security; begins eval of universal basic income #UBI https://t.co/RsvM95tEFs

— Chris Lee (@chrisleeforhi) June 15, 2017

Second, it asked the Department of Labor and Industrial Relations and the Department of Business, Economic Development, and Tourism to convene a "basic economic security working group." The suggested members included the labor committee chairs of both chambers, the Director of Human Services, the head of the University of Hawaii Economic Research Organization, business representatives such as the Chamber of Commerce Hawaii, and labor representatives chosen by the Hawaii State AFL-CIO.

The group was given a clear list of tasks:

  • assess how exposed Hawaii's job market is to automation, globalization and disruptive technology;
  • estimate current and expected safety-net spending if many jobs disappear;
  • identify and analyse options for economic security, including partial and full UBI;
  • follow studies and trials in Hawaii and elsewhere, and look for partners to fund or publish new ones;
  • report findings and any proposed legislation to the Legislature before each regular session.

No money changed hands, no eligibility rules were set and no payment amount was discussed. The full text is on the Hawaii State Legislature's measure page.

Why Hawaii raised the question

The resolution's own findings explain the motive. Hawaii leans heavily on a service economy, and tourism in particular, which the text argued makes it more vulnerable to job disruption than most states. It warned that hundreds of thousands of local jobs could be replaced in the near future and pointed to examples that felt very current in 2017: self-driving vehicles, self-checkout tills, artificial-intelligence tools in law and medicine, cheaper 3D printing, and Airbnb's challenge to the hotel industry.

Hawaii also has some of the highest living costs in the United States, so the gap between a low income and a secure one is wider there than in many places. A state that depends on visitors, imports most of its goods and has limited land has good reasons to think early about what happens if work changes quickly.

The same summer, Hawaii had also made headlines on climate policy, when its governor signed bills committing the state to goals of the Paris Agreement after the federal government announced its withdrawal. Supporters read the two moves together as a sign of a state willing to try ideas ahead of Washington.

The video above gives a short overview of the resolution and the reaction to it.

What "universal basic income" actually means

In its pure form, a universal basic income is a regular cash payment made to every resident, whatever their work status or other income, with no conditions attached. In practice the term is stretched to cover several related ideas, and it helps to keep them apart:

  • Universal basic income: everyone receives the same amount, rich or poor.
  • Guaranteed income: payments go to a defined group, often people on low incomes, and may shrink as earnings rise.
  • Negative income tax: people below a threshold receive money through the tax system, gradually phased out as they earn more.

None of this was new in 2017. In 1969 President Richard Nixon proposed a Family Assistance Plan for families with children whose benefits did not fall away quickly as earnings rose, which made it resemble a guaranteed income; it never became law. Between 1968 and 1982 the United States and Canada ran negative income tax experiments in New Jersey, rural Iowa and North Carolina, Gary in Indiana, Seattle and Denver, and Manitoba. Workers in those studies reduced their labour supply only modestly, by roughly two to four weeks a year.

The closest thing America has to a universal payment is Alaska's Permanent Fund Dividend. Since 1982 the state has paid every eligible resident a yearly share of a fund built from oil revenues; the first cheque was $1,000, and in 2019 dividends of $1,606 went to about 631,000 Alaskans. It is too small and too irregular to live on, but it has run for over four decades.

The trials Hawaii was watching, and what they found

When HCR 89 passed, several experiments abroad were under way or being planned. Their results are now known.

Finland, 2017–2018

Finland's government paid 2,000 randomly selected unemployed people €560 a month, tax-free and with no obligation to look for work, from 1 January 2017 to 31 December 2018. A control group stayed on ordinary unemployment benefits. According to the Ministry of Social Affairs and Health, the effect on employment was small: in the second year recipients worked about six days more on average than the control group. The striking difference was in wellbeing. Recipients reported more life satisfaction, less mental strain, depression and loneliness, better confidence in their own finances and more trust in other people and institutions. The researchers cautioned that a survey with a 23% response rate cannot prove the payment caused all of those differences.

Ontario, 2018–2019

Ontario's Liberal government launched a three-year pilot in Hamilton, Brantford, Thunder Bay and Lindsay, with about 4,000 participants aged 18 to 64, most of whom already had jobs. A single person could receive up to about C$17,000 a year, reduced by 50 cents for every dollar earned. The newly elected Progressive Conservative government announced its cancellation in 2018, citing cost, and the last payments went out in March 2019, long before any planned evaluation could be completed.

Germany and India

Germany had no government trial in 2017; the best-known German project at the time was a privately crowdfunded scheme that raffled one-year basic incomes. In India the idea was discussed seriously in official circles, including in the government's 2016–17 Economic Survey, but no national scheme followed.

What came after in the United States

Hawaii's resolution did not lead to statewide payments, but the conversation it joined grew. During the COVID-19 pandemic, more than 150 American cities and counties used federal recovery money to run guaranteed-income pilots, usually aimed at specific groups; Flint, Michigan, for example, chose to support new mothers. The backlash grew too: Arkansas, Idaho, Iowa and South Dakota passed laws banning local cash-aid programs that have no work requirement, while governors in Wisconsin and Arizona vetoed similar bans.

So the debate has largely moved from "should every adult get a check?" to narrower questions about targeted, unconditional cash for people in specific circumstances, and how such programs compare with existing benefits.

Common misunderstandings

  • "Hawaii passed a universal basic income." It passed a non-binding resolution that endorsed basic financial security and ordered a study.
  • "Basic income makes people stop working." The large North American experiments and Finland's trial both found small effects on work, in either direction, rather than mass withdrawal from jobs.
  • "Basic income has been proven to fix poverty." Trials consistently report better reported wellbeing and financial security, but most were small, short or cut off early, and none tested a permanent, nationwide, fully funded scheme.
  • "It is a left-wing idea." Versions have been proposed by Republican and Democratic politicians alike, from Nixon to Alaska's Republican governor Jay Hammond, who championed the oil fund behind the dividend.

For anyone following the topic today, the practical lesson from Hawaii is to read the fine print: check whether a "basic income" headline refers to a law, a study, a local pilot or a proposal, who is eligible, how much is paid and for how long. Those details decide whether the idea is being tested at all.

Sources: Hawaii State Legislature: HCR 89 (2017) text; Finnish Ministry of Social Affairs and Health: results of the basic income experiment (2020); Wikipedia: Ontario Basic Income Pilot Project; Wikipedia: Universal basic income in the United States; Chris Lee on Reddit (2017); first reported by Futurism.

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