Could $1,200 a month in direct cash help Detroiters? This group thinks so

Steady direct cash — with no strings attached — in the hands of financially struggling Detroiters could help lift them out of poverty.

That’s the case the national nonprofit UpTogether is making. The group sent a letter last week to Detroit City Council members and Mayor Mike Duggan’s office proposing a guaranteed income pilot program in Detroit. They say such a program can address basic needs and bolster financial prosperity in a city where roughly a third of people live in poverty. Guaranteed income programs have gained traction in cities across the country and proponents say it provides a cushion for strapped families.

The goal is $1,200 a month to Detroiters for 24 months, said Kofi Kenyatta, senior director of policy and practice at UpTogether. In its letter, signed by nearly 50 local organizations, the group calls for $3 million, utilizing a portion of the city’s American Rescue Plan Act dollars and philanthropic donations. Ultimately, Kenyatta said the hope is to raise $10 million for the pilot. 

“What we know is that even a temporary cash infusion tends to propel families who go back to school, start a business or have the flexibility and time to find better employment,” Kenyatta said. “Even though this is just a proof of concept and a pilot, we’ve shown that individuals that receive cash assistance are catapulted into their next move into economic mobility.”

He pointed to how the expanded child tax credit in the COVID-19 pandemic reduced poverty. The payments in 2021 cut child poverty nearly in half. Michigan families used the payments on the basics — food, rent, child care, utility bills and clothing. 

In a statement last week, the City of Detroit’s Chief Financial Officer Jay Rising told the Free Press the city would not be able to use its ARPA funds for the proposal “because it would create an-ongoing legacy cost the city itself would have to fund after ARPA funds sunset in just a couple of years.”

ARPA dollars, he said, are aimed toward addressing negative health and economic impacts of the pandemic and it would be challenging to demonstrate each individual’s qualifications under those criteria. He pointed to the mayor’s recent announcement of $100 million in ARPA backed-scholarships to “address the underlying need of reliable income.”

The Kresge Foundation is partnering with UpTogether and exploring ways to advance economic mobility in Detroit through guaranteed basic income, the foundation’s Deputy Communications Director Christine Jacobs said.

In UpTogether’s proposal, community partners would decide what the eligibility criteria would be, Kenyatta said. UpTogether is involved in hundreds of pilots across the country, including in Oakland and Austin, that are each different but generally linked to income thresholds. The nonprofit typically targets individuals below the area median income. Guaranteed income programs also focus on groups Kenyatta said have been historically and currently marginalized.

“You have some cities that are targeting single mothers or individuals that were formerly incarcerated, so it really runs the gamut,” he said.

Programs launch in other cities

In Oakland, the program provides 600 low-income families with $500 a month for at least 18 months. In Austin, the city council in May approved a $1.1 million guaranteed income pilot program, focused on housing stability, that would provide $1,000 a month for a year to 85 households facing eviction or homelessness.

Many Detroit families could not withstand a $400 emergency, a report from Detroit City Council’s Legislative Policy Division noted last year.

“It’s gotta be something freeing and sobering when you can cover the bills in your house and still be able to pursue your dreams in becoming an entrepreneur or going back to school,” said Arlyssa Heard, a 50-year-old resident and community leader in Detroit’s Hope Village neighborhood. Heard, an UpTogether member, supports a guaranteed income program.

Heard said a guaranteed income would help relieve major but necessary expenses hanging over her head, such as medical bills for a surgery. Throughout the pandemic, when families received extra assistance, Heard said they had breathing room in budgets to pursue other goals.

“People were making decisions that said ‘I don’t have to go and work at a fast food joint and be disrespected, catching two buses and covering for childcare and only bringing home less than $500, when I can get $1,000 a week, cover my bills, spend a little money on my children, get them some of the things that they want, all while I’m doing research on how much it’s gonna cost for me to purchase my own food truck,'” she said.

Council members voice support for guaranteed income

Some Detroit City Council members have expressed interest in a guaranteed income program.

Council member Gabriela Santiago-Romero said she supports a targeted guaranteed income program and using ARPA dollars to invest in residents.

“Recipients would be able to focus on furthering their education, learning English as a Second Language, or learning a trade without taking on more debt; or put nutritious food on the table to aid in better health and wellbeing; or being able to pay for daycare, after school care, or other enrichment activities for their children thereby allowing for greater flexibility in a work schedule; or obtain needed physical or mental health care services not covered by insurance,” she said in a statement.

Council member Scott Benson said he supports a guaranteed income pilot to close the wealth gap for the most vulnerable Detroiters.

“I haven’t yet seen this proposal, but I’d want to see a Detroit program that ensures the money be spent in Detroit and prioritizes seniors and working families with dependent children,” he said in a statement.

Council member Mary Waters’ office said she is a strong advocate for universal basic income — recurring cash payments that are not targeted — and has supported bringing a test program to Detroit.