St. Paul plans an experiment to reduce poverty by giving 150 families a monthly $500 stipend at a time when many can’t work because of COVID-19.
“Too many in our community were already struggling long before this pandemic. And we know that this ongoing pandemic will continue to create pain points for those families,” said St. Paul Mayor Melvin Carter Thursday.
The program was designed with the help of a national network, Mayors for a Guaranteed Income. St. Paul will join more than 20 cities nationwide that have already rolled out similar programs. The payments are expected to go out sometime in the fall to families chosen from an existing program, CollegeBound St. Paul.
City councilmember Mitra Jalali said the program will address some of the instability of 2020.
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“We're in a triple emergency as a community right now,” Jalali said. “We are in the emergency of coronavirus and COVID-19. We are in the aftermath of the emergency of systemic and structural racism in our country. And the hurt that broke out and it has been pouring out since in the uprisings in our communities since the murder of George Floyd. And we are in an emergency of prolonged economic downturn.”
The $1.5 million program will be funded through the Mayors for a Guaranteed Income’s philanthropy network, $293,592 in federal CARES Act funds and additional fundraising by the city.
The St. Paul City Council is expected to vote on the program soon to continue it beyond the initial phase. Council President Amy Brendmoen supports it.
“We can't wait. We have stepped up for a minimum wage. We have stepped up with tenant protections,” she said.
The families to receive the stipend will be randomly selected from the CollegeBound St. Paul program. Among the criteria, they must live in one of four zip codes chosen for racial diversity and lack of wealth. There are about 1,000 households who are both part of CollegeBound and live in those four zip codes. The city’s Office of Financial Empowerment will lead that selection process.
The program will be evaluated after 18 months. Carter hopes that St. Paul’s experience aligns with what Stockton, Calif. found when it gave residents $500 a month in a 2018 effort.
“I imagine and expect that we'll find out the exact same thing that Stockton found out in their evaluation and that is that when low-income families have access to a little bit more money at the end of the month. They buy groceries, they pay the rent, they get a car fixed so they can go to work. They do the exact same type of things that you or I would,” Carter said.