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Free Money In Newark: City Experiments With 'Guaranteed Income'

Patch logo Patch 5/11/2021 Eric Kiefer
a man wearing a bow tie: On Monday, Newark Mayor Ras Baraka announced the launch of the city’s highly anticipated guaranteed income pilot program, dubbed the “Newark Movement for Economic Equity.” © AshTproductions/Shutterstock On Monday, Newark Mayor Ras Baraka announced the launch of the city’s highly anticipated guaranteed income pilot program, dubbed the “Newark Movement for Economic Equity.”

NEWARK, NJ — Newark has kicked off a bold social experiment, and it could make New Jersey's largest city a nationwide trendsetter, officials say.

On Monday, Mayor Ras Baraka announced the launch of the city’s highly anticipated guaranteed income pilot program, dubbed the “Newark Movement for Economic Equity.” Hundreds of Newark residents will eventually get unconditional cash payments worth $12,000 spaced out over two years – with no strings attached and no work requirements.

In a city where about one in three residents live below the federal poverty line, the pilot program will be a much-needed source of financial relief, helping vulnerable Brick City residents to fight back against a cycle of economic insecurity, officials said.

The city will start with an initial cohort of 30 residents before ramping up to 400 residents in fall 2021. See more information about the program here.

Supporters say the pilot program isn’t meant to replace other social services, only to supplement them and help some of the people who fall through the cracks of the current system.

“We must emerge from the COVID-19 pandemic with new purpose, new vision and new ideas to transform our community and truly improve the quality of life of our residents,” said Mayor Ras Baraka, who has been one of the earliest advocates for guaranteed income in the city.

“We have an opportunity to directly empower and strengthen hundreds of lives immediately, while also demonstrating how to do so to the entire nation,” Baraka added.

The concept of giving people money with no strings attached isn’t unheard of. In California, the city of Stockton tried giving people a universal basic income program in 2019, offering $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 to 20 black women living in public housing for a year.

However, Newark’s pilot program – which focuses on “guaranteed income” – is a bit different from the concept of universal basic income (UBI). According to officials:

“UBI is a government program that proposes providing every citizen with a lump sum of income every year with no strings attached. Guaranteed income, on the other hand, argues for providing cash payments to specific, targeted communities in order to address income inequality. It focuses on providing cash payments to people living below the poverty line or with inconsistent or no income.”

In Newark, qualifying residents must be at least 18 years of age, live in the city, and have an income level at or below 200 percent of the federal poverty threshold.

Participants will receive $6,000 per year for two years, with 50 percent receiving the payments on a bi-weekly basis and 50 percent receiving the payments twice yearly – a unique twist that will allow the city to see which method is more effective.

The pilot will target a wide range of residents, including people facing housing insecurity, undocumented immigrants, newly housed and formerly homeless, formerly incarcerated people and youth aging out of the foster care system. To recruit the first cohort of residents, the program worked closely with more than 30 nonprofits and municipal departments to identify residents who qualified.

Outreach to roughly 1,400 Newark residents will continue through virtual informational sessions hosted in English, Spanish, French and Portuguese, and a campaign including emails, phone calls and text messages, officials said.

Newark residents who are interested in participating can contact the program manager for the Newark Movement for Economic Equity, Hawaa Muhammad, at 862-235-0859 or hawwa@newarkequity.org.

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Newark’s pilot program will be one of the nation’s largest in collaboration with Mayors for a Guaranteed Income, a national network of mayors advocating for a guaranteed income to ensure that all Americans have an income floor.

The program will be studied over its two-year lifespan, with research led by the Center for Guaranteed Income Research in partnership with Mayors for a Guaranteed Income. Hopefully, the resulting data will “add significantly” to the national discussion about UBI and guaranteed income, officials said.

The program has partnered with MoCaFi, a Harlem and Newark-based, African-American-owned fintech company as its financial disbursement partner. MoCaFi will provide financial banking, as well as optional credit building, and wealth coaching services to pilot participants.

“What was once considered an avant-garde concept is gradually being accepted and implemented across the nation as a way to ensure economic mobility among all Americans, especially in communities of color,” MoCaFi founder Wole Coaxum said.

The city has been reaching out to local philanthropists and corporate sponsors to help power the program. So far, $2.2 million in private funds have been identified, officials said Monday.

Interested donors can contact Kevin Callaghan, Newark’s philanthropic liaison, at callaghank@ci.newark.nj.us.

“As a Newark native and resident, I understand how this intervention will go a long way,” said Hawwa Muhammad, program manager of the Newark Movement for Economic Equity.

“In gearing up to launch this program, so many residents I have connected with are eager about a program that will help them get back on their feet and participate in the local economy,” Muhammad said.

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