St. Paul's guaranteed income pilot a 'life raft' for families

Two bikes and a toy unicorn have sat in Andrea Coleman's basement since Black Friday, and they'll remain there until the mother of three brings the gifts out of hiding Christmas morning.

"They don't think they're getting anything," Coleman said of her children, ages 10, 6 and 1. "I can't wait to see their faces."

The 40-year-old said she wouldn't have been able to afford presents without the $500 monthly payment she receives from St. Paul's People's Prosperity Pilot, the nation's second municipal guaranteed income program and the first to tap into public funding.

For centuries, economists and politicians have advocated for forms of guaranteed income, a concept that's become the linchpin of a modern policy movement aiming to support low-income people by providing cash payments with no strings attached. The idea has picked up steam in the United States in recent years, particularly as the pandemic suddenly multiplied the number of American families facing financial insecurity.

In November 2020, Mayor Melvin Carter launched the St. Paul pilot, which is giving 150 families $500 a month for 18 months. Since then, dozens of cities have rolled out similar programs in hopes of making the case for a federal guaranteed income policy.

"I think we are helping to create a better national understanding of what poverty is and how poverty works," Carter said. "People aren't poor because they lack character. They're poor because they lack money."

Carter sits on the board of Mayors for a Guaranteed Income, a growing coalition of 63 city leaders working to collect data and anecdotes that defy common criticisms of the policy — chief among them, he said, the belief that aid disincentivizes individuals from seeking employment.

Coleman, who works 40 hours a week cooking, cleaning and caring for a handful of clients, said she used one month's payment to cover her car loan. Another went toward the gas and water bills. In June, Coleman enrolled in an online associate's program to study criminal justice, her first step toward a long-held dream of working for the FBI — something she said she wouldn't have been able to do without the financial breathing room the city's assistance provided.

"One of the amazing things about this policy is the way in which just having enough money to get to the end of the month sort of unlocks a world of potential for families," Carter said.

'A big weight' lifted

Felicia Henderson was laid off from her job as a hotel front desk receptionist at the onset of the pandemic in the spring of 2020. Credit card debt was piling up months later when the single mother of three daughters got a letter from the city of St. Paul about a program that sounded too good to be true.

"Once I realized it wasn't a scam," Henderson said, "it was like a little weight — a big weight, actually — just kind of lifted."

Guaranteed income recipients were randomly selected from a list of families enrolled in the city's CollegeBound program, which launched in January 2020 and sets up a $50 college savings account for every newborn in St. Paul.

To qualify, recipients also had to have an income at or below 300% of the federal poverty level and demonstrate that they were economically affected by the pandemic. More than 80% of families selected for the pilot identify as people of color, and nearly half live on the city's East Side.

While Petus Muas' wife, Thi Sai, was pregnant with the couple's first son, his hours at the FedEx facility in Mahtomedi were reduced in pandemic cuts. Muas had never accessed any sort of welfare benefits. He described St. Paul's guaranteed income as a huge relief.

With one of his first payments — which are loaded onto a prepaid debit card on the 15th of each month — he bought a winter coat for his son, Japheth.

"This money made a difference for our family," Muas said, helping to cover rent, groceries and gas at various points during the last year.

He also tries to save about $75 from each month's stipend. The family is expecting a second child this winter, and the St. Paul pilot will wrap up shortly after.

City officials and national advocates acknowledge that local coffers cannot fund guaranteed income in perpetuity. But federal relief efforts launched during the pandemic — including stimulus checks and the Child Tax Credit program — have spurred hope that the idea of unconditional cash assistance might have a shot at gaining political traction.

Polling conducted by Mayors for a Guaranteed Income and Data for Progress in late June showed 55% of 1,137 voters surveyed would support universal monthly payments of $500 to $1,000.

"I think COVID really opened up the public imagination to the federal government's capacity to really quickly and efficiently deliver direct cash," said Sukhi Samra, director of Mayors for a Guaranteed Income.

Pushing for more pilots

St. Paul will be featured prominently in a documentary the group commissioned to "really start to disrupt some of the myths and narratives that paralyze our pursuit of progressive policy solutions that will disrupt poverty," Samra said.

The pilot is also being studied by University of Pennsylvania researchers who evaluated the first municipal guaranteed income pilot in Stockton, Calif., where recipients were more likely to have a full-time job and better mental health after the two-year program when compared to a control group.

"If we can replicate Stockton's findings, then we really have to have a national conversation about this in a way that we never have before," Carter said.

Unlike Stockton, St. Paul used public money — $214,117 of what the city received from the federal CARES Act — to launch its pilot. The rest of the $1.6 million came from grants and philanthropy.

When Carter announced plans for the pilot in the fall of 2020, U.S. Rep. Betty McCollum raised concerns about whether the program was an allowable use of federal pandemic aid and if the payments could affect recipients' eligibility for other assistance. The mayor said the latter concern came into play for about a half-dozen families, who chose not to participate in the pilot after consulting with city staff because the income bump could have disqualified them from other federal or state aid programs.

"That frustrates me to no end," Carter said. "We're putting the help families need on the other side of a mountain of barriers."

The mayor added that St. Paul's public conversations about using pandemic aid for its guaranteed income program likely gave other cities, including Minneapolis, the confidence to leverage federal American Rescue Plan dollars to launch their own pilots.

"When I was laid off, this program was a life raft," said Henderson, the mother of three daughters, who hopes to earn enough money in the coming months to move her family to a safer neighborhood. "I'd like to see more programs like this. Because I know a lot of people it would really help."