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In Cambridge, Mass., every family living below the federal poverty level will soon get a monthly payment of $500, Mayor Sumbul Siddiqui announced this week — making the city the first in the country to expand cash assistance to all locally impoverished households, her office said.
To qualify, a family has to earn less than 200% of the federal poverty level a year, or $55,500 for a family of four, and live in the city of Cambridge. It wasn’t immediately clear how many families would benefit, nor how the city would define a “family” in the program’s context. (Cambridge, a city of 118,000 people and the home of Harvard University, has a poverty rate around 12%, slightly above the national rate of 11.4%.) The program will utilize nearly $22 million in American Rescue Plan Act funds and help families for about a year and a half, Siddiqui said in her State of the City address Wednesday.
“While the details of the program are still being fleshed out, I look forward to working with our community partners to ensure the best possible implementation,” Siddiqui said, according to a transcript of her address that was published by the eastern Massachusetts news site Wicked Local. “We are confident that this appropriation will be a huge force in our recovery from the pandemic and in our efforts to address the inequities that exist in Cambridge.”
Cambridge, like many cities nationwide, has already tried out some version of direct cash assistance: Last year, the Cambridge RISE (Recurring Income for Success and Empowerment) program began providing $500 monthly to 130 single-caretaker families, no strings attached, for 18 months. The participants were selected at random by the Center of Guaranteed Income Research at University of Pennsylvania, according to the Cambridge RISE website. The program was funded by donors including Harvard University, local businesses, philanthropic foundations and individuals.
Cambridge isn’t alone in throwing American Rescue Plan aid into a guaranteed income program, as cities recognize that the COVID-19 pandemic, which disproportionately burdened low-income households and people of color due to widespread job loss, the effects of the virus itself, and the more recent rise in inflation, has left some families in need of cash.
This week, Chicago opened up applications for its Resilient Communities Pilot —part of a greater initiative backed by the American Rescue Plan and local bond funding — and received 90,000 applications from interested residents within 24 hours. In the end, though, only 5,000 struggling families will get $500 a month for a year.
“I want to change the lives of Black and Brown folks. Low-wage workers,” Chicago Mayor Lori Lightfoot said of the program in February, according to WFLD, a Fox affiliate in the city. “Because I come from that. That’s who I am. That’s who my people still are.”
The buzzy city-led guaranteed income programs took off after the Stockton Economic Empowerment Demonstration started giving 125 residents of the California city $500 a month for 24 months to spend as they saw fit Then-Mayor Michael Tubbs, an evangelist for direct cash assistance, was behind the initiative.
Research on the impact of the Stockton program’s first year suggested that the money helped with unexpected expenses, debt payments, and overall stability, and the program was replicated across the U.S. in various formats. Today, dozens of cities are either on board with — or are actively conducting — similar experiments through Mayors for a Guaranteed Income, an organization founded by Tubbs. (Tubbs lost to a Republican challenger in the November 2020 election.)
During Siddiqui’s State of the City address this week, a participant in the Cambridge RISE program said her city’s guaranteed income pilot had helped her afford transportation, childcare, and education expenses while she took classes to become a medical assistant.
“I was struggling to pay my utilities, struggling to pay my friends back,” the participant, Porchia, said, according to a press release from the mayor’s office. “By the time I was finally about to get my first check, my lights had went off.”
Guaranteed income programs aren’t without any thorns, however. Critics often fear the programs amount to costly incentives that inspire people to work less, and only about a third of Americans said they felt it was very important that the country provide a universal basic income in a Pew Research Center survey last year.
Still, research on an Alaskan program that gives residents of the state an annual payment suggested it did not significantly affect employment, apart from increasing part-time work.
Source: This post first appeared on http://marketwatch.com/