Minneapolis to launch $500 per month guaranteed income pilot program

200 Minneapolis families to receive $500 per month for 24 months

This week, Minneapolis Mayor Jacob Frey joined City Council Vice President Andrea Jenkins and City leaders to announce Minneapolis’ Guaranteed Basic Income (GBI) pilot program.

Minneapolis’ GBI program will provide 200 participating families with an income boost of $500 per month for 24 months to support household financial growth and stability. Applications will be open on the City of Minneapolis website before the end of 2021, and payments will start arriving with families in early 2022.

The pilot program will invest funding from the American Rescue Plan Act to directly serve families most impacted by the pandemic. A similar 18-month pilot program was launched last year by St. Paul Mayor Melvin Carter.

Related Story: St. Paul experiments with guaranteed incomes

City staff is working with the Federal Reserve Bank of Minneapolis to have them provide a rigorous evaluation of the program that city leaders will use to add to the body of national research on the impacts of GBI programs and inform future city initiatives.

“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,” said Mayor Frey. “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.”

“We have come to a point in our society, that because of unchecked violent capitalism, many folks in our communities are unable to meet their basic needs, even when working full-time (40 hours per week) jobs,” said City Council Vice President Andrea Jenkins. “The most likely impacted by these low wages to support increasingly rising costs are low wealth, women of color with children, and of that subset many are Black. 

“Economists from around the world have long posited that Guaranteed Basic Income must become a reality to lift people out of poverty. This pilot is an opportunity to support the most vulnerable members of our society and learn what are the most effective ways to accomplish that.”

Minneapolis’ GBI pilot program will be funded with $3 million in American Rescue Plan Act (ARPA) funding. This funding was part of Mayor Frey’s first round of ARPA funding that was proposed in June to prioritize the most urgent needs in Minneapolis with a strong emphasis on economic recovery.

Eligible households must have an annual income at or below 50% of the Area Median Income for Minneapolis, be currently residing within one of nine specific zip codes across several Minneapolis neighborhoods, and have been financially impacted by COVID-19.

The ZIP codes included in the program include 55403, 55404, 55405, 55407, 55411, 55412, 55413, 55430, 55454. These neighborhoods were selected for this program because they encompass the highest concentrations of poverty, measured by three metrics: 15-13% of people are living at or below the poverty line; unemployment rates between 11 and 24%; and the lowest annual incomes in the city.

“Understanding economic access is not divided across our city evenly, we decided to set the pilot program within neighborhoods of concentrated poverty that have been hardest hit by the pandemic,” said Erik Hansen, Director of Economic Policy and Development at the City of Minneapolis.

“Using an income ceiling of twice the federal poverty guideline, we hope to show that GBI can give the financial stability to low-income residents to allow them to pursue education and job training, pay for reliable childcare, or simply provide financial flexibility,” said Hansen.