The city of Alexandria, Virginia, is joining a growing number of cities across the U.S. that are sending money to poor residents, no strings attached.
By: Ally Schweitzer
Bolstered by nearly $60 million in federal pandemic relief money, the independent jurisdiction in Northern Virginia plans to begin sending $500 debit cards to 150 families each month for two years, starting sometime this fall. The initiative was inspired partly by feedback city leaders solicited from residents about how the cash infusion should be used, says Alexandria Mayor Justin Wilson.
“We received 1,300 different suggestions from folks,” the mayor says, “and one of the priorities was trying to make sure that we make the kind of sustainable investments in our community that will pay dividends long into the future.”
Cities across the U.S. have begun to embrace the concept of guaranteed income, in which governments simply give cash to residents who need it, with no limits on how the money can be used. The former mayor of Stockton, California, launched the country’s first guaranteed income pilot program in 2019. Since then, seven other cities have debuted similar initiatives, and 16 new programs are in development. On the state level, California Gov. Gavin Newsom included $35 million for a guaranteed income program in his most recent budget.
Supporters say cash grants have the potential to lift residents out of poverty and narrow the racial wealth gap. A preliminary analysis of Stockton’s program showed that it reduced income volatility, allowed residents to find full-time work, and improved recipients’ mental health. The Biden administration has made inroads into a similar policy with the newly beefed-up Child Tax Credit, which has drawn comparisons to a basic income. In D.C., lawmakers recently approved an enhanced Earned Income Tax Credit, which will provide the country’s most generous tax benefit to low-income families.
One hundred miles south of Alexandria, the concept of a guaranteed income for poor residents has gotten a foothold in Richmond, Virginia, where Mayor Levar Stoney unveiled the Richmond Resilience Initiative in 2020.
The two-year pilot provides $500 a month to randomly selected low-income households, with a big boost from Twitter CEO Jack Dorsey, who contributed $15 million to fund basic income programs across the country. An additional half-million dollars from the tech billionaire allowed Richmond to expand the experiment from 18 families to 55.
Nonprofit groups in D.C. rolled out a similar effort during the worst days of the pandemic, funded by philanthropic dollars. The effects of that program, called THRIVE East of the River, are being studied by the Urban Institute. Early findings show that recipients used the money to cover basic needs, including housing and groceries.
Alexandria is funding its new basic income initiative with $3 million in American Rescue Plan money. The city is expected to receive a total of $59.4 million from the massive relief package, with half already allocated to a host of programs that support small business, worker training, food security, eviction prevention, and environmental improvements, among other efforts. The second half of the federal money arrives in May 2022.
The national conversation about cash assistance has been changing, Wilson says. Last year, former Stockton mayor Michael D. Tubbs launched a national network of city leaders called Mayors for a Guaranteed Income. The coalition has grown to include mayors from almost 60 cities, from Los Angeles to Jackson, Mississippi. Mayors in the coalition are part of a generation of leaders who are thinking more about how to get immediate assistance to people in need, rather than forcing them into complex government programs that ration public assistance through layers of bureaucracy, Wilson says.
“Instead of an elaborate process and procedure … it’s, ‘We’re going to give you $500 a month,’” the Alexandria mayor says. “You find the best way to use this money to help you and your family.”
The best possible outcome is that the extra $500 allows low-income families to pursue opportunities they can’t now, he says.
“A lot of low-income families can’t take the risk of quitting the job they have, or going into a different job that leads to greater career advancement. They have to stick with the lowest risk alternative,” he says. “So in many ways, I think what this could allow is some of that risk that ultimately leads to more wealth attainment and financial security.”
Alexandria is a relatively wealthy city, with a median household income of $103,000 a year, according to 2019 Census estimates. But the poverty level is 8.6%, about 10% higher than the region’s overall rate. Fourteen percent of Alexandria’s children live below the poverty line.
Most mayors who have embraced basic income are Democrats, but Wilson points out that the concept has attracted conservative support in the past. In 1969, President Richard Nixon proposed a national assistance program called the Family Assistance Plan. It would have provided as much as $1,600 in annual benefits — around $10,000 in today’s dollars — to a family of four with no income. The proposal failed in Congress, and Nixon later changed his tune on welfare reform, influenced by advisers who believed cash assistance would discourage people from working. The idea that welfare breeds laziness and moral decay went on to find a champion in President Ronald Reagan.
But Wilson believes there’s bipartisan appeal to basic income programs: They could slash the red tape and administrative expenses now baked into public assistance.
“It’s the same reason that 50 years ago, folks who were pretty conservative were looking at basic income. We have built quite a bureaucracy around public assistance, and maybe that’s not the most efficient or effective way to do that,” he says.
Officials are still developing Alexandria’s new guaranteed income program. The city has yet to determine how families will be selected, how and when they can receive funds, and whether the new income source could compromise residents’ eligibility for other public benefits. But when the money does start to flow, Wilson says, the city will be closely studying how it affects recipients.
“We’re going to take a very scientific approach,” Wilson says. “I think we’ll learn a lot.”
