This US City Will Give $5 Million To 400 Families Over 18 Months. Will Basic Income Work?

City leaders in St. Louis, Missouri have stepped up to provide monthly cash payments to families struggling to meet basic needs amid economic woes and lingering pandemic financial fallout.

The St. Louis Board of Alderman, the legislative body of the city, has passed a motion to provide monthly payments of $500 to more than 400 local families. And on Dec. 28, Major Tishaura Jones announced that she had signed the bill into law.

To qualify for the payout, families must have at least one child enrolled in city public schools, have experienced a quantifiable negative financial impact related to the COVID-19 pandemic, and must earn less than 140% of the U.S. poverty line, which is around $47,000 per year for a family of four.

The funds dedicated to the program, which total around $5 million, will be allocated from remaining American Rescue Plan funds, and the payouts will continue for 18 months. According to Mayor Jones, if the program succeeds, it could be widened and added to the city’s arsenal of anti-poverty tactics.

Jones, who is a member of the organization Mayors for Guaranteed Income, joins dozens of other mayors across the country who are piloting guaranteed income programs for their constituents.

The Mayors for Guaranteed Income group first rose to prominence in 2019 when then-Mayor of Stockton, Calif., Michael Tubbs, launched a guaranteed income pilot for 125 low-income city residents. The program, an overwhelming success, helped lift Stockton residents out of poverty and proved that universal basic income is a significant boon to those in need.

“That’s the power of basic income — in terms of this notion of dignity,” Tubbs previously told Fatherly. “It allows people the opportunity to provide for and enjoy the people that they love, their families, and their communities.”

Data from previous guaranteed income programs proves that monthly payouts help families pay for necessities, provide extra stability and flexibility for those in need, and promote a stronger sense of community and trust in local government. Research shows that most of the funds distributed through basic income programs are used at big-box superstores such as Walmart and Target, as well as other retail establishments. Grocery stores and restaurants are the second most common expenditure, and money was also frequently spent on housing, utilities, medical care, and educational expenses.

The St. Louis basic income program is something of a continuation of a program Mayor Jones, who has spoken out several times against St. Louis’ high rates of poverty, spearheaded last year. Nine thousand area families were provided with a one-time payment of $500, allocated from federal pandemic relief funds. Follow-up surveys found that the majority of the funds were spent on food, utilities, and gas. Jones told reporters that the city’s response to the one-time payment “echoed how the extra $500 highlighted the deep need for help and support.”

If the St. Louis basic income program is as successful as other cities’ programs have been, it will add to the mounting pile of evidence that guaranteed basic income is a vital tool to effectively and seriously fight poverty in the U.S. — and that a broader approach should be considered, not just at local and state levels, but at the federal level as well.