St. Paul gave $500 each month to 150 people: Here's what happened

Following an 18-month stretch in which the City of St. Paul offered a monthly payment of $500 in pre-paid debit cards to 150 of its residents, a study is offering a glimpse of the guaranteed income program's effectiveness.

During the onset of the COVID-19 pandemic, St. Paul Mayor Melvin Carter and the St. Paul City Council launched the People’s Prosperity Guaranteed Income Pilot (PPP), which was the first-ever Mayors for a Guaranteed Income (MGI) pilot program. It’s also the first time a major city has proposed using public funding for a guaranteed income program since Seattle and Denver launched the Seattle-Denver Income Maintenance Experiment (SIME/DIME).

The PPP program’s intent sought to, "address structural inequities through progressive public policy and programming that promotes belonging, mobility, and agency for all residents."

Since its inception, results from the influx of income to residents have been studied by the Center for Guaranteed Income Research (CGIR) at the University of Pennsylvania.

Researchers found that the number of people employed increased by 14% – from 49% at the beginning of the program to 63% six months after it had ended – 21 participants of the 150 enrolled.

It also found a 7% increase in participants transitioning to "better quality homes" during the same period – 10.5 participants of the 150 enrolled.

Recipients also self-reported fewer symptoms of anxiety or depression, while saying they had favorable levels of, "general health, physical limits, and physical functioning." When payments stopped, "a decrease in average general health" was reported among participants.

"A guaranteed income addresses the basic cause of poverty – a lack of money," said Mayor Carter in a press release following the results. "This pilot shows that a relatively small, no-strings-attached payment can open up a world of opportunity. Leveraging unconditional cash on a national level is an obvious tool that can dismantle generational poverty."

"The guaranteed income payments took a weight off my shoulders," said Lucille O’Quinn, a guaranteed income recipient, in the press release. "It helped me go from survival mode to feeling like my family is going to be okay, no matter what."

However, research suggests that recipients also became reliant on the extra income throughout their daily lives. Survey findings, "supported the notion that participants experienced relatively stable financial well-being throughout the pilot, but faced a dip once the guaranteed income stopped."

During the PPP program, 39% to 41% of participants had more than $500 in savings during the intervention, but the number fell to 27% six months after the program ended.

Additionally, between 40% to 47% of participants could cover a $400 expense, but six months after the PPP stopped, only 33% could.

To receive the payments from October 2020 through April 2022, the city randomly selected 150 participants from its CollegeBound St. Paul program and invited them to participate in PPP if they self-attested to being impacted by COVID, and had income at or below 300% of the federal poverty level. All participants also had a child born in 2020.

CollegeBound St. Paul is a universal college savings program designed to give, "all of St. Paul’s young children a $50 seed deposit in a college savings account at the time of birth."

St. Paul used several sources of funding to implement the PPP, combining funds from the federal COVID-19  Aid, Relief, and Economic Security (CARES) Act, re-purposing state-level dollars from a Minnesota Department of Human Services grant, and securing private funding from individual donors and organizations.

"The results from St. Paul’s guaranteed income program fill me with hope," said Michael D. Tubbs, founder of MGI in a press release following the results. The MGI pilot is a coalition of 125 mayors, of which Mayor Carter is a co-chair, and St. Paul is the first to implement public funding for guaranteed income to qualified residents. "They are similar to what we saw in Stockton [California] – people found better jobs, moved into safer housing, had more time to spend with their children, and overall felt more hopeful and less anxious about the future. It shows that guaranteed income can and does make families and communities stronger and more resilient."