New Orleans will pay 125 young people $350 a month for most of next year under a program that seeks to help youth build wealth and boost their financial literacy.
The program is aimed at residents aged 16 to 24 who are neither working nor in school, Mayor LaToya Cantrell and other officials said Thursday.
Those residents will receive the funds through a prepaid bank card provided by Mobility Capital Finance, also called MoCaFi. Charter school networks and other partners will refer program participants to City Hall.
The program will launch in mid-2022 and provide money to young people for 10 months, Cantrell said. The cards that participants receive will double as passes to city recreation centers, and can also be used on public transit and at public libraries.
“This will connect our most vulnerable residents to meaningful financial equity, and efficiently link them to city services through the use of technology,” the mayor said.
The program is being funded by Mayors for a Guaranteed Income, which advocates for direct cash payments to impoverished people.
That group was founded in June 2020 by Mayor Michael Tubbs of Stockton, California, and the nonprofit Economic Security Project, which supports guaranteed income payments for all Americans. The goal of such payments is to fight poverty and income inequality, advocates say.
Such universal income programs have long been controversial, with critics saying they cost too much and disincentivize employment. But the idea has gained new traction since the coronavirus pandemic wreaked havoc on the nation’s economy, and after George Floyd’s death caused a national reckoning on racial inequities.
Cities such as Tubbs’ Stockton, Columbia, South Carolina, and Newark, New Jersey, have launched pilot paycheck programs in the past year. Now, New Orleans officials want to put cash in the wallets of wayward young people.
“Too often, many of us are overlooked when it comes to creating innovative financial tools that can strengthen our families and our neighborhoods,” said Wole Coaxum, the founder and CEO of MoCaFi. “The Crescent Card program changes the game on that.”
The city has also partnered with MasterCard and with the mayor’s Forward Together New Orleans initiative to launch the program, officials said. Charter school network Collegiate Academies has pledged to refer program participants, and a representative from the First 72+, which advocates on behalf of formerly incarcerated people, said Thursday that the cards would help people create bank accounts, build credit and create wealth once they exit the criminal justice system.
It is the second partnership between MasterCard and the city in recent months. The financial services company has also begun to host programs in New Orleans to empower small businesses, increase financial literacy and provide support to historically Black colleges and universities, officials said.
The card is expected to be launched in the spring or summer of 2022.