Twin Cities donors gave 15 people $1,000 a month in yearlong guaranteed income experiment
Pamela Bidear plays with her son in her apartment in St. Paul in December 2021. Photo by Max Nesterak/Minnesota Reformer.
It had been years since Pamela Bidear had a regular income when she began receiving $1,000 a month in October 2020.
Bidear fled her native Cameroon in 2017 amid political turmoil that left her husband dead. She traveled to Nigeria, Ecuador, Mexico, California and Texas before finding refuge in a shelter for asylum seekers in the Twin Cities.
While the federal government agreed to hear her plea for asylum, which offered her temporary permission to stay in the country, it came with no resources to survive or a work permit.
By the time she finally received authorization to work in April 2020, the pandemic had led employers to begin shedding workers by the millions. Still, she tried, taking a job selling knives through Cutco. It proved an impossible task amid widespread lockdowns.
“I couldn’t really do anything,” said Bidear, who has a young son.
Then Bidear was chosen to participate in Project Solid Ground, an experiment funded by Twin Cities philanthropists. She and 14 others received $1,000 a month to spend however they chose.
For Bidear, the guaranteed income was transformational.
She used the money to save up for a car and most critically, pay for child care so she could afford to work. She now has a full-time job — with benefits — helping coordinate COVID-19 testing sites and her own apartment in St. Paul.
“The money helped me to transition to where I am right now,” Bidear said.
The idea of providing Americans with no-strings-attached cash payments has grown in popularity in recent years in response to growing inequality as the jobs that once provided a middle class income were offshored or replaced by machines. Interest has only grown since the beginning of the pandemic, with progressive lawmakers calling for monthly payments to all Americans.
Proponents of a guaranteed income, or universal basic income, want the federal government to ultimately provide monthly cash payments for all Americans. But cities and private donors have been piloting the idea to show that unconditional cash is a more effective tool to combat poverty than the country’s patchwork of assistance that makes poor people jump through bureaucratic hoops to pay for food, medical care, transportation, housing and heat.
Twin Cities investor and philanthropist Nancy Somers, who helped fund “Project Solid Ground,” first became interested in the idea of guaranteed income with the presidential campaign of Andrew Yang, whose signature issue was that the federal government should pay all American adults $1,000 per month.
When the pandemic reached Minnesota in March 2020, Somers decided to try it.
“We’re in the midst of a pandemic and an economic crisis, and I am looking around thinking, even though I can’t do a lot, I can do something,” Somers said.
Somers rallied a group of donors, who have chosen to remain anonymous, to provide $1,000 monthly payments to 15 Twin Cities residents.
They worked with Avivo, a social services non-profit, which randomly selected people such as Bidear enrolled in their programs for mental health and addiction treatment, housing support or employment training.
Each person received a debit card loaded with $1,000 each month from October 2020 through September 2021. The debit cards allowed people to receive the funds even if they didn’t have bank accounts and allowed Avivo to track what people spent the money on.
One recipient used the money to pay for a daughter’s college application fees. Another paid off some student loans. A third was able to pay for internet service so they could get a job online. Yet another is on track to buy a house.
Mostly, the money went to four things — food, clothing, medical care and transportation.
“The idea that people who are living in poverty are going to make bad choices with a universal basic income is just not accurate,” said Kelly Matter, CEO and president of Avivo.
Now that the experiment has ended, Bidear will miss the $1,000 a month. But she said she prepared for it coming to an end. She has assistance through other programs that will help her continue paying for childcare and rent. She’s also been able to save money for an emergency.
Somers, the donor, hasn’t met any of the recipients but received letters from them at the end of the pilot program. Some of them brought tears to her eyes, like the note from the person who gave away the money one month to a friend in need. That resonated with Somers, who gets joy from giving away money as a philanthropist.
“It was really just heartwarming,” Somers said
Project Solid Ground replicates, on a very small scale, what’s been shown by other guaranteed income projects across the country.
The city of Stockton, California, was the first to pilot a guaranteed income program with funding from philanthropists, paying 125 families $500 a month for two years. A study of the program found people who received the fund were more likely to find full-time jobs, be happy and stay healthy. Less than 1% of the tracked purchases were used on tobacco or alcohol.
It inspired St. Paul Mayor Melvin Carter to launch a guaranteed income pilot in November 2020, the first to use public funding. It is providing $500 a month for 150 low-income families for 18 months.
Minneapolis is now accepting applications from families to pilot a similar program beginning in the spring, which will provide 200 households with $500 a month for two years.
Somers acknowledges some of the money was likely spent in ways that she wouldn’t approve of, but says she doesn’t want to be in charge of what the people use the money for.
“I want people to be able to make choices for themselves, and I trust people,” Somers said.
Somers was so pleased with the outcome that she’s planning to help fund another year of guaranteed income for millennials because of the economic disadvantages they’ve experienced in coming of age during a recession, often burdened by student loan debt.
Ultimately, she wants the federal government to provide a basic income to all Americans. Since the start of the pandemic, the government has moved closer to providing regular, unconditional cash payments through a series of stimulus checks and a temporarily expanded child tax credit that sends most parents $250 or $300 a month per child, depending on the child’s age.
“It’s an idea whose time has come,” Somers said.
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