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WATCH NOW: 18 Richmond families to get $500 monthly for next 2 years under guaranteed income program
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WATCH NOW: 18 Richmond families to get $500 monthly for next 2 years under guaranteed income program

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The program will give 18 qualified working families $500 monthly for 24 months.

An experimental pilot program in Richmond will give $500 a month to 18 families over the next two years, Mayor Levar Stoney announced Thursday.

The guaranteed basic income is expected to help randomly selected families that no longer qualify for public benefits programs but are still struggling to make ends meet in essential or service industry jobs making only slightly more than $13 an hour.

Though the cash will help a few families struggling economically during the COVID-19 pandemic, the Richmond Resilience Initiative is based on an idea supported by a coalition of 25 mayors who believe regular direct payments to low-income families can help alleviate wealth inequality for future generations.

“Poverty is symptom of centuries of injustice, not a result of personal failure. Richmond must lead the way in lifting hard-working families up,” Stoney said. “This is part of something much bigger: a national movement toward economic stability and the fight for a living wage.”

Stockton, Calif., was the first city of the coalition to test out the program, providing 125 of its residents $500 monthly with support from the Economic Security Project, a nonprofit interested in the concept of guaranteed income.

That city’s effort, led by Mayor Michael Tubbs, led to the creation of Mayors for a Guaranteed Income in June. Other cities in the network, including Seattle; St. Paul, Minn.; Atlanta; and Jackson, Miss., have recently announced similar programs.

Former Democratic presidential candidate and entrepreneur Andrew Yang made the general concept, also known as universal basic income, a pillar of his campaign. Though his campaign was unsuccessful, he helped make the not-so-novel idea more mainstream.

The 18 selected families in Richmond have children and are clients of the city’s Office of Community Wealth Building, an agency that supports about 900 low-income residents annually and guides housing, workforce development and other poverty reduction programs.

Richmond is allocating $240,000 for the program. The Robins Foundation, a local nonprofit, will provide half of the funding, with the city drawing the rest from its federal CARES Act relief funding, said Sam Schwartzkopf, a spokeswoman for Stoney.

Valaryee Mitchell, the office’s director, said the city will not mandate how the families can use the money, but expects it will be used to improve their situations or avoid spiraling further into poverty.

“Imagine if your car breaks down and you don’t have the money to repair it. What kind of impact would this have on you and your family?” she said. “The stipends ... will give folks the opportunity to make car repairs, pay unexpected medical bills or other unexpected costs — or it may give them the ability to invest in wealth building, things like homeownership and savings accounts.”

She and other city officials said the aid could be key to helping low-income families facing what’s known as the “cliff effect,” or a situation where a household’s breadwinner may find a better-paying job, but it inadvertently disqualifies them for public assistance that they would still need each month.

Schwartzkopf said the head of a single-child household who makes more than $12.71 an hour generally would not be eligible for public benefits. While that’s higher than Virginia’s current minimum wage of $7.25 per hour, the Massachusetts Institute of Technology’s living wage calculator estimates that a single parent must make $27.10 an hour, full time to support a home with one child.

Stoney said the 24-month pilot could lead to an expanded program. He said the city, in collaboration with the Federal Reserve Bank of Atlanta and Richmond, will keep track of how the money is used and how it impacted the lives of the families to determine its future.

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