Minneapolis city leaders announce guaranteed income pilot program

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Minneapolis families experiencing financial hardship due to the pandemic can apply for up to $500 per month under a new pilot program.

Minneapolis Mayor Jacob Frey, City Council Vice President Andrea Jenkins and other city leaders announced the program’s launch on Wednesday.

The Guaranteed Basic Income (GBI) program will provide 200 families with an income of $500 per month for 24 months to support household financial growth and stability, the city said. Applications will open online before the end of the year, with payments to families starting early next year.

It will be funded with $3 million from the American Rescue Plan Act.

According to the city, the Federal Reserve Bank of Minneapolis has worked with the city and provided a rigorous evaluation of the program.

"The pandemic has exacerbated racial economic disparities in Minneapolis and the communities most impacted have been front and center in the creation of the Minneapolis GBI program," Frey said. "We used a data-driven approach to create this pilot and get cash assistance in the hands of families that need it most in their time of need. This illustrates our continued commitment to directly supporting the unique needs and individual situations facing the most vulnerable families in our city."

To be eligible for the program, Minneapolis residents must have an annual income at or below 50% of the Area Median Income in the city, have been financially impacted by COVID-19 and live in one of nine zip codes — 55403, 55404, 55405, 55407, 55411, 55412, 55413, 55430, 55454.

The city said those neighborhoods were specifically selected because they encompass the highest concentrations of poverty based on the percentage of people living below the poverty line, unemployment rates and lowest annual incomes in the city.

City leaders said the money will be "unrestricted," meaning families can spend it on whatever they want. They noted research from similar programs in other cities shows most people spend it on basic needs, such as housing and utilities.

"It will provide those families with the freedom to continue to support the needs they have," Erik Hansen, the director of economic policy and development for the city of Minneapolis, said.

The city of Stockton, California was the first to launch a guaranteed income experiment in 2019. St. Paul followed suit in the fall of 2020.

"These areas of poverty in Minneapolis have not changed much in the next generation and so this is a strategy to try and address that," Hansen said.

Greater Twin Cities United Way told 5 EYEWITNESS NEWS the need in the metro is "significant" right now, as families try to recover from the pandemic.

"I think it will make a difference," Greater Twin Cities United Way President and CEO John Wilgers said. "If you are homeless or if you can’t afford housing or if you are hungry, everything else is impacted, your ability to work, your ability to care for your kids, all those things are impacted. So a solution to some of these needs for basic needs is really important."