PROVIDENCE – The city of Providence is testing out a guaranteed income program of monthly, no-strings-attached payments starting with 110 low-income residents, Mayor Jorge O. Elorza announced in a press conference on Tuesday.
The pilot program comes after Elorza in September joined a coalition of mayors nationwide pledging to start or expand guaranteed income programs in their cities as a means to address socioeconomic inequities.
Elorza in his address shared his own childhood experience dealing with the “oppressive burden and the weight of financial challenges” – his mom working second shift because his family could not afford child or day care, with finances a constant pressure and motivator behind decisions.
“When I think back to it, so many family disputes were financial,” he said.
All it takes is one $500 emergency – a broken down car, a child care issue, new shoes – for a family already on the brink to lose what little they have, Elorza said, citing national statistics about lack of savings among many families.
“This program, as radical as it is, is very simple. Let’s put money into the hands of those who need it the most, and allow them agency,” Elorza said.
Providence’s program will give $500 a month to 110 city residents who earn at or below 200% of the poverty level – equal to $25,760 for one person or $53,000 for a four-person household. Participants will be chosen through an application and lottery process overseen by the Center for Guaranteed Income Research at the University of Pennsylvania, which will study and evaluate the effectiveness of the yearlong pilot program. The Center will also choose a control group who do not receive the payments to compare outcomes.
Proponents of these payment programs say they are crucial to narrowing the wealth gap and helping low-income people succeed. Research on a similar program already adopted in Stockton, Calif., showed recipients were more likely to get and keep full-time jobs compared with those in similar socioeconomic circumstances who do not get payments.
“This program holds tremendous potential for helping to stabilize Providence families, especially our BIPOC neighbors who have long faced systemic barriers to opportunity and prosperity, and who have been most harshly impacted by the pandemic,” Cortney Nicolato, president and CEO of United Way of Rhode Island, said in a statement. “While more must be done to create a more equitable Rhode Island, we are proud to be a part of realizing innovative initiatives aimed at helping to strengthen our communities as a whole.”
The city will use $1.1 million in cash and in-kind donations, including a $500,000 contribution from Twitter CEO Jack Dorsey, to pay for the program. Elorza did not include any money for the program in his proposed fiscal 2022 budget.
The city, working with a number of community groups, will begin outreach about its program through a series of informational sessions starting July 20, with applications accepted from Aug. 15 to Aug. 21. Other partners on the program include The Rhode Island Foundation, RI Kids Count, the Economic Progress Institute, Dorcas International Institute of Rhode Island and Amos House.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
Great scam by Elorza to buy votes without having to dip into his campaign funds.
Sounds great as long as we don’t waste taxpayer money on the program. That would make it reek of Communism.