In 2020, St. Paul, Minnesota, launched a guaranteed basic income pilot project, providing $500 to 150 families for up to 18 months. As part of this first experiment, all participating families are enrolled in CollegeBound St. Paul, a citywide savings account initiative. The program, which went into effect in fall 2020 and is starting to come to a close, has become the latest example of how providing people with a guaranteed income can give communities a boost and impact their work and personal lives.
For Andrea Coleman, the $500 monthly automatic deposit that she receives from the city means everything. Coleman works a second job as a home care nurse, but her priority is her work as a stay-at-home single mother, caring for a multi-generational family. She was randomly chosen in September 2020 for the program from a list of families enrolled in the CollegeBound program.
“Getting randomly chosen was like getting the lottery because I’m a single mom and I had one income, and because of the [guaranteed basic income] program, I suddenly had two,” Coleman said.
In September 2021, the St. Paul City Council, with the support of Mayor Melvin Carter, agreed to use just over $214,000 of CARES Act money received by the city, alongside over $1.5 million in philanthropic funding and money from the Minnesota Department of Human Services, to support the development of a guaranteed basic income pilot project. St. Paul is one of 33 cities in the country testing out a guaranteed basic income program.
To be eligible for the People’s Prosperity Guaranteed Income Pilot, families must have at least one child, have been impacted by the COVID-19 pandemic, and be financially eligible. Program members receive an email notification and administrators deposit the $500 monthly payment onto a debit card sent to the families.
Muneer Karcher-Ramos, the director of the St. Paul Office of Financial Empowerment, says guaranteed basic income is about giving people the flexibility they need to make important life decisions.
“Guaranteed income is unconditional cash, no strings attached, no work requirements, for families to use it as whatever makes sense within their lives,” Karcher-Ramos said. “We look at it as a tool for racial and economic justice to provide families with the flexibility and the agency to make decisions over what they need to make in their own lives.”
According to Karcher-Ramos, guaranteed basic income (which he notes differs from universal income) has also positively impacted participants’ work experiences.
“Participants of these types of programs are able to find full-time employment or to have different types of job mobility,” Karcher-Ramos said. “Imagine you’re a wage worker who feels really constrained by that hourly work. Participants have characterized it as, ‘I was able to basically go in a round of interviews. I was able to take time off because I didn’t have to worry about not getting paid my wage because I had this other income that helped me cushion what I was able to do.’”
Through the guaranteed basic income program in St. Paul, many workers have found the flexibility they needed to take time off work, switch jobs, or deal with job loss. Karcher-Ramos said one woman took time off of her office job to take a coding class and now works doing computer coding.
“It is not preventing people from getting to work or going to work, it is allowing people to pursue other types of opportunities,” Karcher-Ramos said.
Coleman agrees with Karcher-Ramos’ assessment. She says the $500 deposit allowed her to make decisions about her work.
“Because of [guaranteed basic income], if the people I cared for could not take care of me, I knew that I could give them a break,” Coleman said. “I could take the work I needed, and still focus on caring for my family.”
The plan was originally met with some resistance by other elected officials, particularly since St. Paul was the first city in Minnesota to experiment with such a plan. Some of the elected officials, including Rep. Betty McCollum, who represents Minnesota’s 4th Congressional District (which includes St. Paul), were concerned that some randomly selected families would lose access to other government benefits if they were part of the program. Seven of the originally selected families were unable to participate in the program because it would have put them into a higher income bracket, forcing them to lose government benefits.
“Mayor Melvin Carter’s economic policy around this is that if you bet on your everyday worker, your everyday parent, your everyday family, that is the best bet to make,” Karcher-Ramos said.
Since St. Paul launched its guaranteed basic income program, dozens of other cities, including Minneapolis, have also launched similar projects. Minneapolis recently closed an application process for their own guaranteed basic income experiment. Resident applicants will be chosen to participate from several Minneapolis zip codes (many of which have predominantly BIPOC residents); their annual income must also be at or below the area median income, and the pandemic must have harmed them in some way. Two hundred participants will receive a $500 monthly payment for two years.
In St. Paul, assessment of the city’s guaranteed basic income program continues as well as internal discussion on the future of another similar program. Folks like Coleman are urging the city to continue investing in a guaranteed basic income program.
Coleman is also urging all individuals chosen for guaranteed basic income projects in the future, whether in St. Paul, Minneapolis, or elsewhere, to take advantage of the opportunity.
“This program is a blessing,” she said. “Don’t fight it. It doesn’t require anything, no classes.”