Low-income entrepreneurs, gig workers and people with side hustles in Ann Arbor can soon apply for a program offering cash assistance each month, no strings attached.
The University of Michigan’s Poverty Solutions group — with $1.6 million in funding from Ann Arbor’s tranche of federal pandemic relief aid — will take applications for a guaranteed income program and related research study between Oct. 2 and Oct. 13.
Ann Arbor joins Louisville, Kentucky; Madison, Wisconsin, and dozens of other cities across the U.S. experimenting with the concept that recurring cash sets families up for financial success. Earlier this year, a national nonprofit pitched Detroit officials to bring a guaranteed income program to Detroit.
The idea behind guaranteed income is to provide cash payments to people without restrictions or work requirements to help them meet their basic and pressing needs the way they see fit. Supporters of guaranteed income programs say it provides a cushion for strapped families, helping to lift the burden of having to make tough choices, such as deciding between purchasing food or paying the power bills.
Thirty-nine percent of Michigan households can’t afford to keep up with the basics, including rent, child care, food, health care and utilities, according to the Michigan Association of United Ways.
“This guaranteed income pilot is about celebrating residents who do much to strengthen our community but are still struggling to make ends meet,” said Kristin Seefeldt, lead researcher of the program and an associate professor at the University of Michigan, in a news release.
Here are details about Ann Arbor’s guaranteed income pilot program:
How much money will accepted participants receive?
The pilot will randomly select 100 eligible applicants to get $528 a month for two years, starting early next year, alongside another 100 pool of applicants who will participate in the research study. This second group will not receive the cash assistance. However, both groups will be asked to take surveys about how they are using the cash assistance, if they receive it, and how they afford housing, food and child care. For each survey, participants will get $50.
Who is eligible for Ann Arbor’s guaranteed income program?
- Entrepreneurs, small business owners, independent contractors, gig workers or people who provide paid services informally. Some examples of this type of work include those who provide child care, shovel snow or own a lawn care business, according to the program’s website.
- People who live in Ann Arbor and are at least 18 years old.
- Those who have an income at or below 225% of the federal poverty line, or a family of three earning $55,935. It’s likely that participation may impact benefits. The program expects to let people know if that’s the case.
Forty-three percent of households in Ann Arbor do not earn enough to afford the basics, according to the United Way.
The pilot is focusing on entrepreneurs to learn whether the cash boost will help business efforts or allow applicants to scale back jobs they must take on in order to make ends meet. Guaranteed income programs typically target certain groups. A program in Louisville, Kentucky was geared toward young adults, while another effort in Austin, Texas would provide guaranteed income to households facing eviction or homelessness.
In March, the national nonprofit UpTogether made the case for a guaranteed income pilot program in Detroit, that would offer $1,200 a month to Detroiters for 24 months.
“Our progress so far has been promising. We have engaged with several council members and the mayor’s staff. We’ve also been invited to several community meetings to discuss the proposal. More than 50 local organizations signed on to our letter of support. We think the table is set for Detroit to get guaranteed income,” said Rachel Barnhart, UpTogether’s director of media relations, in an email on Thursday.
There’s evidence, advocates say, that guaranteed income programs work. They point to the effectiveness of the expanded child tax credit — $3,600 for kids under 6 and $3,000 for those ages 6 to 17 — in reducing poverty during the COVID-19 pandemic. In 2021, the payments cut child poverty nearly in half. The expanded program lasted through 2021.
How to apply and more information:
The application will be available online and in person. For more information, https://giga2.org/.