Calling race-based poverty and financial instability in the pandemic-era part of a “series of compound crises,” St. Paul Mayor Melvin Carter on Thursday announced he had created an 18-month guaranteed basic income program by executive order. The city will issue $500 monthly to 150 low-income families impacted by the pandemic.
“If our budget does not reflect our values, they’re not our values,” said Carter, who evoked slain civil rights leader Martin Luther King Jr.’s anti-poverty campaign while acknowledging that critics would call the effort “far-fetched or even a radical idea.”
Appearing at City Hall for a rare in-person news conference, the mayor noted that more than 70,000 residents in the city of 315,000 people had applied for unemployment benefits since the start of the COVID-19 pandemic. He sought to link a national increase in violent crime to growing race-based poverty and hopelessness, exacerbated by racial tension.
”What’s changed in our country right now … is not a number of police officers,” the mayor said. “What’s changed is an amount of desperation.”
He added: “We have more families right now that are experiencing homelessness, more families that are out of work, more families that are struggling to feed their children.”
Carter’s executive order launches the 18-month demonstration program, which will be funded largely by philanthropic support, as well as nearly $300,000 in federal CARES Act dollars. Major funders are expected to be announced shortly. The Mayors for Guaranteed Income national network will pay for program evaluation.
The mayor said he did not expect to use local property taxes for the $1.5 million effort, which is still completing its fundraising, though he had not closed the door to the idea.
St. Paul Mayor Melvin Carter says crime is on the rise nationally due to desperation. A guaranteed income pilot project will give $500 per month to 150 low-income families for 18 months, starting this fall. pic.twitter.com/rJZ4sMId0Y
— Frederick Melo, Reporter (@FrederickMelo) September 3, 2020
ACTION BY CITY COUNCIL REQUIRED
Mayors of Atlanta, Los Angeles and some 20 other cities involved in the Mayors for Guaranteed Income coalition have called the growing distance between rich and poor in America too great to surmount through hard work alone.
Backed in part by Twitter and Square CEO Jack Dorsey, Stockton, Calif., Mayor Michael Tubbs began a program making $500 monthly payments to 125 families in the winter of 2018. Stockton recently extended the program into January 2021.
Carter said the goal of St. Paul’s pilot program is to prove the effectiveness of a guaranteed universal basic income to state and federal leaders, with the hopes they’ll run with it.
It also lends itself to study and evaluation. Early analysis found that families enrolled in Stockton’s UBI effort spent the extra money on food, clothes and utility bills, rather than on frivolous things, as some critics had predicted.
The St. Paul City Council will consider a resolution on Wednesday to use CARES dollars and house the program within the mayor’s Office of Financial Empowerment. Later this fall, the payments will require further action by the council to sustain the program for the entire 18 months.
In announcing his executive order on Thursday, the mayor was joined by City Council President Amy Brendmoen and Council Member Mitra Jalali.
“It’s a shame how much time we spend fighting each other for the crumbs down here at the local level,” said Brendmoen, lambasting “billionaire companies whose net wealths are growing (during) COVID and continue to pay people poverty wages.”
Jalali, who represents the Midway area hard hit by riots and arson following the May 25 killing of George Floyd in Minneapolis, noted that most Americans do not have more than $500 in savings to devote to a sudden emergency, including housing displacement.
“A community is stronger when the individuals in it are stronger,” Jalali said.
The two council members said existing financial safety net programs have eroded with time, failing to keep up with the true cost of living, and Brendmoen said some are so onerous they do more to keep the poor in poverty.
The mayor’s office said that unlike other social programs, the payments will be unconditional, with no strings attached and no work requirements. They are intended to supplement, rather than replace, existing social safety net supports.
150 FAMILIES TO BE CHOSEN
The city will pick 150 families to apply from among the 1,800 families who have already been enrolled in CollegeBound St. Paul, a Carter initiative that creates college fund accounts at Bremer Bank for children born within the city. Payments will begin in the fall.
Applicants must demonstrate they have been impacted by the COVID-era economy through reduced work hours, inability to find affordable childcare or actual sickness.
The families will be chosen from within four of St. Paul’s most diverse and lowest income ZIP codes — 55104, 55106, 55119 and 55117 — spanning the Midway, Frogtown, Union Park, Dayton’s Bluff, Payne-Phalen, Battle Creek, Highwood and the North End.
The median household incomes in these neighborhoods is $35,000 a year, according to Wilder Research.