$12K For Free: NJ Town Ramps Up 'Guaranteed Income' Experiment

NEWARK, NJ — What would you do with an extra $6,000 a year if you didn’t have to work a single hour for it? Officials in New Jersey’s largest city are hoping the answer for many people is simple: invest in their families.

On Monday, Newark officials announced that the city is expanding its experimental “guaranteed income program,” which provides unconditional cash payments to local residents. Participants in the pilot program get $12,000 over a two-year period, with no strings attached and no work requirements.

The money is coming from a mix of private and corporate donations, as well as public funds from the federal American Rescue Plan. Read More: Newark Will Get $182 Million From COVID Relief Bill

After beginning with a group of 30 residents, the second phase of the program has swelled to 400 people, many of whom are experiencing “housing insecurity,” Newark officials said.

According to officials, the city’s program is slightly different from the concept of universal basic income, where every resident would get cash payments. Instead, guaranteed income targets specific communities and demographics – mainly people living below the poverty line.

Newark’s program isn't meant to replace other social services – only to supplement them. But in a city where nearly one in three residents live below the federal poverty line, and many can’t survive a simple $400 emergency, the cash will be a much-needed source of financial relief, supporters say.

Eligible residents were invited to apply to the program in July via a partnership with the Center for Guaranteed Income Research at University of Pennsylvania. In order to qualify, people were required to meet four criteria:

• Must be a Newark resident
• Must be at least 18 years of age
• Must possess an income at or below 200 percent of the federal poverty line
• Must be adversely impacted by the COVID-19 pandemic

After just two hours, the portal received more than 1,200 applications, easily surpassing the 400-person capacity. All final participants were chosen randomly, officials said.

The payments are being disbursed by Newark-based MoCaFi – a Black-owned financial technology company that is also running a similar corporate program for Audible, an Amazon-owned company headquartered in Newark.

• See related article: Audible Will Give 400 Newark Residents $75 Per Week – For Free

Kaleena Berryman, program manager of the Newark Movement for Economic Equity, said the first wave of cash payments have already been making a big difference for dozens of local families.

“To hear their stories – the losses many have suffered due to COVID-19, and how these additional dollars will be used to help them recover – have been inspiring,” Berryman said. “We are proud to support this project, serve residents, and over the next two years, connect them to other city resources that can help them achieve personal goals.”

A similar program was recently tried out in Stockton, California, which offered $500 a month for 18 months to 125 low-income residents. Another initiative was launched in 2018 in Jackson, Mississippi, where $1,000 a month was given for a year to 20 Black women living in public housing. Many reported spending the money on crucial needs such as dental work, car repairs or paying off "predatory debt" and higher education costs.

‘INVESTING IN FAMILIES’

Newark isn’t alone. Mayor Ras Baraka is one of 60 elected officials across the U.S. who have pledged to create a guaranteed income pilot in their home cities under the Mayors for a Guaranteed Income partnership.

While all of the pilots will be similar, Newark’s is a bit different because of the way it is spacing out its payments. Half of the participants are getting $250 bi-weekly, and the other half are receiving $3,000 twice yearly.

Either way, it adds up to a better tomorrow, Baraka said.

“At a time when our city still faces the challenges of COVID-19 and its economic impact, the biggest and most important institution that we should be investing in is families,” Baraka said. “This will give our residents a much-needed boost and allow them to participate in the economy, regain their economic independence and strength, and move toward prosperity.”

“This type of intervention can support our economy and our future,” he added.

Want to help fund Newark’s guaranteed income experiment? City officials said interested donors can contact Newark’s philanthropic liaison, Kevin Callaghan, at callaghank@ci.newark.nj.us for more information.

• See related article: 'Guaranteed Income' For Every Newark Resident? Here's The Plan
• See related article: Free Money In Newark: City Experiments With 'Guaranteed Income'

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