VIEW: Alicia Gibson on Guaranteed Basic Income
As a candidate for the Minneapolis City Council Ward 10 seat in 2021, I ran on a platform that called for Minneapolis to become a pilot city for universal (or guaranteed) basic income (GBI). Last January, a report out of Stockton, California, detailed results from a two-year pilot study of a similar program there. As the first candidate in Minneapolis who called for the adoption of something similar, I was thrilled with the recent announcement by Mayor Jacob Frey that he has designated $3 million of our $271 million in American Rescue Act funding to launch a pilot study to begin in 2022.
Saint Paul was the second city in the nation, following Stockton, with a GBI program of their own. The People’s Prosperity Pilot focuses on young families with newborns. The program launched in February 2021 and 150 families are receiving $500 for 18 months. In addition, $10 a month is added to a college fund for all children participating in the study.
Part of my training has been in international development and conflict resolution, where there is ongoing dialogue about the most effective use of aid. It can be helpful to support the specialized expertise that nonprofits offer. However, in many instances, evidence shows that giving cash aid directly to impoverished people — particularly to women who most often form collective partnerships — enables communities to improve their conditions more effectively. They not only use the money to lift themselves and their children out of poverty, but the opportunity helps them get “soft skills” training to tackle other local problems.
The evidence out of Stockton confirms this. When people were given $500 a month for two years, the majority of recipients were able to make financial decisions that increased their income at or above $500 a month, so they could exit the program at a more financially secure position than when they started. Recipients were able to do things like enroll in skills and career training, buy a car to make it easier to reliably get to a higher paying job, or pay off lingering debts.
The hope is that Stockton’s results can be tested and verified in Saint Paul and Minneapolis so that it becomes an initiative our state leaders can likewise champion. When practical programs are allowed to be tested, we can show the success of progressive principles in action.
These $500-a-month payments will not be exempted from income reporting in Minneapolis. In contrast, the funding in Saint Paul is considered disaster relief and won’t count as income. The lack of exemption matters — those living on the margin often cannot accept small increases in income that would improve their conditions in the long-run, but would not be enough to keep them off the street in the short term. When door knocking in Minneapolis’ Ward 10 this summer, one of our local small landlords told me of his frustrations with the Catch-22 that kept one of his subsidized renters from accepting his offer of a part-time property management job to give his renter a resume-building opportunity, as well as training for a career. The renter declined the job offer because taking on the 10 hours a week job could jeopardize his housing subsidy, which would have made his rent unaffordable even with the extra income.
These differences in funding approach in Minneapolis and Saint Paul will enable comparative analysis about how we give people enough of a guarantee that they can begin to take on more opportunities instead of keeping themselves contained inside an impoverishment box.
American culture relies on a myth of prosperity that justifies income inequality — we assume anyone can get ahead equally, which is not true if you look at cost of living and pay gaps. To be sure, there are individuals whose personal stories fit the “rags to riches” narrative, but the data shows that the vast majority of us will remain in the economic class we were born into.
When we give people who are living in poverty more money, and they show themselves capable of using that money to better their lives, the lie of the American prosperity myth becomes visible. That is when we will finally begin to create narratives — and public policy — that is more closely connected to the truth.
Resources
“The Birth of a New American Aristocracy,” The Atlantic
Next City map of GBI programs
