The Mayor of Newark, New Jersey, is launching an experiment that will give hundreds of people free money for two years after a similar – and proponents say successful – for two years.in Stockton, California.
Newark Mayor Ras J. Baraka, a Democrat and member of the Mayors’ Advocacy for Guaranteed Income Association, first launched the idea in March 2019 to help the city’s struggling citizens.
Now that the COVID-19 pandemic has put its plans on hold, Baraka is unveiling a pilot program called the Newark Movement for Economic Equity. The two-year program pays a random sample of 400 Newark residents ages 18 and older with household incomes 200% below the federal poverty line for two years, a sum of $ 12,000 each.
Half of these people receive monthly payments of $ 500, and the other half receive four payments of $ 3,000 that are paid semi-annually.
“We’re going to get real data and join forces with the rest of the mayors across the country who are doing similar projects and advocate a national model of what is best for cities and what is best for people – in terms of how they’re going to get the money and what they’re going to spend it on, “Baraka told CBSN’s Tanya Rivero.
Baraka said he was confident that the scholarships would give recipients a lasting economic boost.
“It is important that people have unrestricted access to money, without any restrictions [allows] them to spend it the way they can. And the stimulus checks people are getting are evidence of that – evidence that this has to be done, “he told CBSN.
Private donors will fund the program, but the goal is “to convince the federal government that this should be done permanently with mayors across the country,” Baraka said.
Former Stockton Mayor Michael Tubbs was the first to test a guaranteed basic income program. Known as the Stockton Economic Empowerment Demonstration, there were more than 100 randomly selected city dwellers living below the poverty line with monthly payments of $ 500 for two years.
The programand other positive effects on participants, including improved mental health outcomes, economic researchers noted.
Baraka expects similar results in Newark.
“Talking to the first four people who get the money right away, people will spend the money to improve their education outcomes, take classes,” he said, adding, “People will use that money to spend more time to be able to spend with their family in their homes to buy groceries and pay for electricity and all kinds of bills that are in their households. ”