St. Paul guaranteed income helps families of color

They were 150 young families already on fragile financial footing when COVID-19 inflicted even more pain.

All welcomed newborns to their families in 2020. They all suffered direct economic fallout from the pandemic, including furloughs, lost jobs and lost child care. More than 80% of families identify as people of color and nearly half live on the city's East Side.

That is an early snapshot of the recipients of an 18-month guaranteed income program, an initiative aimed at providing direct aid to families during the pandemic, but also to test a new model for helping people in need.

Muneer Karcher-Ramos, St. Paul director of the Office of Financial Empowerment, shared the overview of the People's Prosperity Pilot on Tuesday. He emphasized that the goal is not to make this a permanent city aid program, but to see if the idea can help shape the national debate about assisting low-income residents.

"It is really intended to push on federal policy and state policy, in particular, to look at how does this become part of the tool kit within our social safety net," he said.

Each family is receiving $500 a month in income defined as "unconditional, no strings attached and no work required," Karcher-Ramos said.

Payments for some families started in October, and the program was fully operational by November.

The aid is meant to supplement the existing social safety net money, not replace it, he said.

Mayor Melvin Carter was a founding member of the nonprofit Mayors for a Guaranteed Income group. Under his leadership, St. Paul became the second city in the nation, behind Stockton, Calif., to launch a guaranteed income program last fall. About 30 cities across the country are participating in similar demonstration projects now.

"In a country that works for all of us, no one who works full time should be stuck in poverty or worried about making ends meet," Carter has said in explaining his motivation.

St. Paul is the only program in the nation that focuses on young families with newborns, Karcher-Ramos said. That's because the city used its new infant college savings account program, CollegeBound St. Paul, to recruit families for the income program.

Karcher-Ramos said 40% of participating families identify as Black; 25% as Asian, 13% Hispanic and 2% Native American. All are at or below federal poverty guidelines.

The presentation Tuesday did not have names or specific details about individual recipients.

Sixty-four of the families live in the two wards that make up most of St. Paul's East Side; 29 live in the Fifth Ward, which includes the North End and Payne-Phalen; and 23 live in the First Ward, which includes Frogtown and Summit-University.

"The number of people we are reaching is incredible. The initial reports are really heartwarming," said City Council President Amy Brendmoen, who represents the Fifth Ward.

Income guarantee programs have gained momentum this past year as scholars study the impact of direct payments as part of federal COVID-19 relief packages.

But Karcher-Ramos said Martin Luther King Jr. wrote of the concept in the 1960s.

"The idea of a guaranteed income is not that new," he said. "It is having its reawakening right now."

He said data from the first pilot program in Stockton, Calif., already show that families are using the additional money to buy groceries and pay for utilities and car repairs.

The program will cost $1.53 million, and the city has already distributed about $350,000. The city has secured the program's funding through a variety of sources including the federal CARES Act, state funding and philanthropic dollars.

Kasey Wiedrich, St. Paul's financial capability program manager, said participant families are still learning to fully trust the program. She said that for many, it initially sounded "too good to be true."

Wiedrich said that in a year of uncertainty, some families said the guaranteed income gave them a little room in their budget to celebrate the holidays.

"There was just a sense of relief from families about knowing that this money was coming," she said.

Shannon Prather • 651-925-5037