Could Minnesota be among the first states to offer a basic income program?

Could Minnesota be among the first states to offer a basic income program?
Could Minnesota be among the first states to offer a basic income program?


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Minnesota could be one of the first states in the nation to pilot a basic income program, with lawmakers considering a $100 million proposal that would provide up to 10,000 people hundreds of dollars every month.

The idea of a no-strings-attached cash aid has been around for centuries. But researchers and advocates say it has exploded in the U.S. like never before, fueled in part by the success of pandemic-era programs and available federal funds.

Minnesota has already been on the forefront of that cultural shift to give more people free money and let them figure out how to use it.

St. Paul, Minneapolis and several local nonprofits have launched guaranteed income pilot programs since 2020. State legislators also leaned into other ways to distribute cash without conditions last year. They gave rebate checks to more than 2 million Minnesotans and passed the nation’s highest child tax credit, with about 300,000 families receiving up to $1,750 per kid this tax season.

“A lot of families are just struggling due to rise in the cost of living and housing,” said Mercedes Yarbrough, whose family gets $500 a month through St. Paul’s guaranteed income pilot program for low-income families with a child born after January 2020. She said the multitude of more restrictive programs, like housing vouchers, haven’t always made a difference for those need, and “maybe the way that they were doing it is the reason why.”

Yarbrough recently went to the State Capitol to urge lawmakers to support the basic income proposal.

The $100 million price tag on that bill is giving people sticker shock and it’s unlikely to pass this year in its current form, conceded Democratic Rep. Athena Hollins. But she said legislators could scale it back while retaining the goal of providing some Minnesotans “that little bit of flexibility to create a better life.”

Resurgence of basic income

Providing some — or all — citizens with a basic, or guaranteed, income is not a new idea and has been tried across the world.

In the United States, Thomas Paine proposed a basic income during the Revolutionary War era, noted Sara Kimberlin, executive director of the Stanford Center on Poverty and Inequality. The idea reemerged in the 1960s, when Martin Luther King Jr. said the civil rights movement should back a guaranteed income to address poverty.

Then the idea faded from the spotlight amid the focus on welfare reform and work requirements in the 1980s and 1990s.

But the latest surge in popularity has resulted in more widespread action than ever before.

There have been more than 150 basic income experiments in the U.S., according to Stanford University’s Basic Income Lab. While a few date back decades, the overwhelming majority launched in the past five years, their data shows.

Many communities say Stockton, Calif., helped kickstart the trend. That city started a program in February 2019 with philanthropic support, giving 125 families $500 a month for two years. A study of the program’s first year, before the pandemic hit, showed the number of participants with full-time employment climbed and their physical and mental health improved.

“It allowed people to interrogate their own assumptions,” said Stacia West, director of the Center for Guaranteed Income Research at the University of Pennsylvania. She helped evaluate the Stockton program, as well as the St. Paul pilot program that launched about a year later.

There’s long been an assertion that if you give poor people money, they will spend it on drugs and alcohol, said St. Paul Mayor Melvin Carter, but the research on guaranteed income programs is “negating all of the tropes and myths that we all grew up believing about poverty. It shows us that low-income Americans know how to spend their money, they know how to budget.”

St. Paul was the first city to use the influx of federal pandemic funds to launch a guaranteed income program, Carter said, and other communities followed.

Around the same time, Andrew Yang’s 2020 long-shot presidential bid was elevating a national discussion of the idea, with his platform centered on giving every American adult $1,000 a month.

The concept of a basic income has drawn supporters from both the left and right over the years, said Luke Shaefer, director of Poverty Solutions at the University of Michigan, who helps lead a guaranteed income program in Flint, Mich.

During COVID-19, the federal government — first under former President Donald Trump then President Joe Biden — embraced a do-with-it-what-you-need approach to distributing cash, he said. The federal government expanded unemployment benefits, provided stimulus payments and boosted the child tax credit.

Poverty fell and jobs bounced back faster than previous recessions creating “an explosion of interest” in cash payments, he said, as people started to consider, “Maybe cash is a simpler way to help families. Maybe it’s more effective, because families can put it to what they need.”

Lawmakers clash over bill

Republican lawmakers have sharply opposed the basic income proposal at the Minnesota Capitol.

The pilot program would give grants to nonprofits and local and tribal governments, which would distribute payments. To qualify, recipients would have to be receiving public benefits or have a household income at or below 300% of the federal poverty level, which is $93,600 for a family of four.

Under the House bill, a recipient would get at least $500 a month for at least 18 months, in addition to any other public benefits they are already getting. If someone got a higher-paying job during that time, they would still get the benefit.

“There’s no guardrails to this, no antifraud or integrity measures,” said Rep. Ben Davis, R-Merrifield. Both he and Rep. Anne Neu Brindley, R-North Branch, described the bill as having the potential to be “Feeding our Future on steroids,” referring to the massive fraud case where a nonprofit claimed to be feeding needy children but authorities say they were pocketing federal money.

GOP lawmakers also opposed allowing immigrants living in the country illegally to receive the dollars, and pushed back against the general concept.

“My philosophy has always been: get government out of the way, give people the opportunity to work hard with their own hands and to provide for themselves,” Davis said. He said the bill is “opening the door for us being a socialist state.”

Hollins, DFL-St. Paul, said the bill aims to start a conversation and she is open to adding more oversight or tightening some restrictions.

Trust is key to guaranteed income programs, said Wanda Walker, director of operations at the Wilder Foundation, which administered a 12-month program.

“That’s a major factor in these types of programs, the families trusting us and then we trust them to do what’s best for their families,” Walker said. “Our families are the experts on themselves.”

Yarbrough is the community engagement director at Victoria Theater Arts Center who is active in the Rondo neighborhood. The St. Paul mom started receiving $500 a month last summer, and has put the money to use on some expenses she could have predicted, like day care for her two youngest sons. Others she never could have foreseen, like allowing her fiancé to take time off work to care for his younger brother who was shot.

Or Tuesday’s expense: A trip to the movies to celebrate her son’s birthday.

“It was just a breath of fresh air. Like, OK, I can buy my kid a birthday gift, or I’ll be OK getting tires,” she said of the program. “It doesn’t matter your situation, you’ll still be able to have those funds and help with whatever is needed.”

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