Beginning this fall, a small number of St. Paul families will receive a modest boost to their monthly budgets. Last week, Mayor Melvin Carter said the city will join others in providing cash payments to low-income families.
It's an idea worth trying — both to help struggling families and to answer questions about wider use of guaranteed income payments.
St. Paul's program, called the People's Prosperity Pilot, will pay up to 150 families $500 per month for up to 18 months. The $1.5 million needed to fund the program will come mostly from federal CARES funds and contributions from nonprofits. Participating families will be randomly selected from the four most economically challenged ZIP codes in the city.
The first cash payments are expected to begin this fall; recipients will receive debit cards for their monthly allotment. Some programs for low-income families dictate how the funds must be used, but this one comes with no strings attached. That leaves families to decide how best to use the additional income and allows sponsors to track purchases to determine how funds are used.
Earlier this year, Carter was one of 11 U.S. mayors who committed to trying guaranteed income program and forming the Mayors for Guaranteed Income (MGI). As of Friday, the list of mayors signing on to continue or create programs had grown to 25. They'll be following the lead of Stockton, Calif., Mayor and MGI founder Michael D. Tubbs, who has been giving 125 residents $500 per month since February 2019. Several other cities have similar programs or are considering guaranteed income pilots.
The mayors argue that providing cash is a simple, powerful way to do the most good for the most people for several reasons. It moves quickly into the economy and can fill gaps for those who are only partly covered by or left out of existing social safety net programs. It also provides flexibility for a wide range of needs. It can be used to rent, food, a car repair to get to work, a computer for distance learning, school supplies — and those needs can change from month to month.
The universal basic income concept isn't new, but has recently had renewed interest. The idea has roots dating back to the civil rights era, when it was promoted by the late Martin Luther King Jr.
Finland sponsored a program for its chronically unemployed between 2017-19. And earlier this year, Spain's government announced plans to provide some form of guaranteed income to a large segment of its population.
Both conservative and liberal researchers have studied the idea, with some arguing that guarantee income could replace current programs for lower-income families at less cost to government.
Former Democratic presidential candidate Andrew Yang proposed that all Americans be paid a "freedom dividend" of $1,000 a month — a sentiment shared by tech founders like Mark Zuckerberg and Elon Musk.
Still, questions remain about such projects: What happens when the pilot funds run out? Can and should government take them over? And is this approach a better way to assist families than current program? Pilot data should help provide answers.
Carter points out that 75,000 St. Paul residents applied for unemployment since the pandemic struck, so an income boost is especially needed now.
"More than ever before, this economic crisis has pushed families into crisis, struggling to maintain basic necessities for their children," Carter said in a statement. "This demonstration pilot is an exciting new approach to support our most vulnerable families while helping build the case for permanent guaranteed income programs at state and federal levels."