Los Angeles will randomly choose 3,000 families to receive a guaranteed monthly income of $ 1,000 month for one year. Applying near or at the deadline doesn’t affect chances of being selected.
Eligibility is based on the following five criteria:
- Reside in the City of Los Angeles
- Be 18 years of age or older
- Have at least one dependent child or be pregnant - dependent child is younger than 18 or a student younger than 24
- Have income level at or below the federal poverty line
- Have experienced economic and/or medical hardship related to COVID-19
The cash payments are meant to supplement existing programs like WIC, CalFresh and Medicare.
There are no restrictions on how the money can be spent by recipients. The city’s website for the program Big:LEAP, notes that “the people enduring financial instability or poverty are best positioned to make informed financial decisions that efficiently address their household’s needs.”
Another 3,500 applicants will be chosen as part of a control group to answer surveys on wellbeing. They'll receive $30 in gift cards, but not a monthly deposit.
The city notes that 2 out of 10 people in Los Angeles live in poverty.
Los Angeles’ smaller neighbor to the west, West Hollywood, has been giving $ 1,000 a month to seniors who are part of the LGBTQ community. The city says that demographic was selected since about 45% of residents identify as LGBTQ.
In a released statement from June 2021, prepared by West Hollywood’s Human Services and Rent Stabilization Department, it was stated that more than “53 mayors across the U.S. support and/or have developed” guaranteed basic income programs.
Where will the money come from?
Guaranteed income programs have been operating throughout the U.S. with many cities giving $500 a month to eligible families for a year. An article in the Providence Journal notes that funding is coming from private sources including Jack Dorsey, the founder of Twitter.
The guaranteed income program in LA and other cities is actually part of a larger research project taking place across the country in conjunction with the Center for Guaranteed Income Research at the University of Pennsylvania.
The Providence Journal reported that the cost of running the program for 110 households in Providence, Rhode Island will cost more than $ 723,000 while the families will each receive $500 a month for one year, totaling $ 660,000.
Costs for the Providence, Rhode Island program included:
- $415,000 for the research study run by the University of Pennsylvania's Center for Guaranteed Income Research, which helped to develop the pilot program and will be evaluating its effectiveness
- Another $96,000 for salaries and benefits for staff administering the program
Other costs included recruitment, money set aside if any recipients lost other benefits, and additional administrative costs.
The first program of the kind was during 2019 in the city of Stockton where 125 randomly selected residents received $ 500 monthly for two years. The effort was developed by Mayor Michael Tubbs who helped begin the Stockton Economic Empowerment Demonstration (SEED).
The effort was hailed as “a simple yet innovative solution to poverty and inequality.”
In addition to funding families in need, the city of LA says the effort is also meant to "transform the role of local government."