Minneapolis will launch basic income pilot program

Minneapolis will soon support 200 families with its new guaranteed basic income pilot, an experiment in alleviating poverty by paying low-income households $500 per month for two years, no strings attached.

The city has set aside $3 million of American Rescue Plan Act funds for the program, Households must earn less than 50% of area median income to be eligible. The program echoes a similar experiment that St. Paul launched in 2020 and dozens of other cities nationwide, whose leaders have made testing grounds to inform federal welfare policies.

Minneapolis wanted to try guaranteed basic income because federal COVID money offered an opportunity for something radically different to address the city’s intractable racial disparities, said Erik Hansen, the city’s Director of Economic Policy and Development.

“We have some of the largest gaps in wealth-building in the country. We have some of the highest gaps in homeownership by race, in high school graduation by race. Workforce participation rate is going to be determined based on skin color in Minneapolis and St. Paul,” he said. “We need to start thinking of different ways to try and address this disparity.”

Traditional welfare programs impose a number of work and education conditions. Food stamps require able-bodied adults without dependents to work at least 20 hours a week or participate in job training programs.

“Where there’s a public benefit, there’s always the expectation on the individual that they are owing something to that system, and one thing about [guaranteed basic income] is giving agency to the recipient,” said Mark Brinda, manager of Minneapolis Employment and Training.

Guaranteed basic income should be much more straightforward than traditional benefit programs, which can be problematic for those with language barriers, said Bo Thao-Urabe, executive director of the Coalition of Asian American Leaders.

The burden of translating often falls to immigrant and refugee children, she said. Families face confusion around what counts as work-training activity, and having to apply for jobs that don’t fit their skills in order to meet basic criteria for receiving food assistance.

“It makes it extremely difficult for people who are in poverty to put additional conditions on the financial assistance that they get,” Thao-Urabe said.

Research around the effectiveness of guaranteed basic income is limited because multi-year nationwide pilots are still in their infancy.

…