This Michigan City Is Trying to Extend $500 Stimulus Payments for Families. What’s the Catch?

Ann Arbor, a city in Michigan, is looking at ways to spend the more-than-$24 million it’s receiving from the American Rescue Plan, including on a universal basic income program that would double as a study.

The city is considering a program that could give dozens of families based on their financial need, to receive $500 payments every month for three years.

The catch? Researchers would then gather data from these families to look at how the money impacts both those families and the community. 

This project had been already done in Stockton, California, in which the city was able to deliver monthly checks of $500 to 125 mostly low-income residents.

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The study showed that recipients of the checks were “healthier, showing less depression and anxiety and enhanced well-being” than those in a control group not receiving them.

At the start of the study period in February 2019, according to the analysis, 28% of recipients had full-time employment; a year later, 40% did. By comparison, full-time employment in the control group rose only from 32% at the start to 37% after a year.

“What we saw was that individuals were able to leverage the $500 in ways that enabled them to show up and fill out a job application — if you’re working part-time and taking care of a child, there’s not a lot of time in your day,” Stacia West, an expert in social work at the University of Tennessee, says. “Financial scarcity creates time scarcity.”

Because of the pandemic, the structural inequities in the U.S. economy and the virtues of universal basic income are magnified. 

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This manifests into lower-income households becoming more vulnerable to losing their jobs over the last year, or being pushed over the edge to poverty by cutbacks in work hours or higher expenses for child care because of school closures.

Ann Arbor hasn’t settled on the universal basic income program yet, but residents of the city will have the opportunity to weigh in on it and provide other ideas for spending the federal funding.

Stay tuned for more news here at the East County Gazette.