Get All Access for $5/mo

Poor Residents in One of America's Largest Cities Might Soon Get Guaranteed Income One mayor is arguing that providing a guaranteed income to low-income residents can particularly help them during the pandemic.

By Justin Chan

Los Angeles could be the largest city in the U.S. to offer guaranteed income to poor residents, according to Fortune. Mayor Eric Garcetti is set to ask the City Council to put aside $24 million from next year's budget so that L.A. can send $1,000 monthly payments to 2,000 low-income families for one year. While candidates would be selected from the city's 15 districts based on the proportion of low-income residents living in each area, Garcetti told Fortune that he is hoping to specifically help families that have at least one minor and have been severely impacted by the pandemic.

Los Angeles would be the latest city — albeit one of the larger ones — to test a guaranteed income program that has been championed by the likes of civil rights leader Martin Luther King Jr., economist Milton Friedman and former presidential candidate Andrew Yang. Other cities that are currently experimenting with the program include Stockton, Calif.; Saint Paul, Minn.; and Chelsea, Mass.

As Fortune points out, Garcetti is co-chair of Mayors for a Guaranteed Income, an initiative founded by then-Stockton-mayor Michael Tubbs that pushes for the implementation of a guaranteed income on a federal level. The organization has also funded local programs, with financial assistance from Twitter's Jack Dorsey and Michael Bloomberg's Bloomberg Philanthropies.

Related: Jack Dorsey's $15 Million Helps Expand on Universal Basic Income Pilot Program

In the past year, the Mayor's Fund for Los Angeles, a nonprofit connected to Garcetti, has distributed nearly $37 million to 104,200 residents through a prepaid debit card. The city is expected to receive more than $1.3 billion in federal stimulus funds that could help with additional payouts to families struggling during the global health crisis.

"There's no question the pandemic is proof that this works," Garcetti told Fortune, in advocating for guaranteed income. "Small investments have big payoffs."

As an example, the mayor pointed to Stockton, which distributed $500 a month for two years to 125 families. Research from Mayors for a Guaranteed Income reportedly revealed that, in the first year, recipients received full-time employments at more than twice the rate than non-recipients. The former group also reported lower levels of anxiety and depression.

"Low-income Americans know what to do with additional resources to build health and wealth, but too many of them are caught in the cycle of poverty," Garcetti said.

The mayor said that participants in his Basic Income Guaranteed: L.A. Economic Assistance Pilot program — otherwise known as Big:Leap — would also be asked to take part in studies that analyze the impact of the payments on their livelihoods.

"How many decades are we going to keep fighting a war on poverty with the same old results," he told Fortune. "This is one of the cheapest insertions of resources to permanently change people's lives."

Justin Chan

Entrepreneur Staff

News Writer

Justin Chan is a news writer at Entrepreneur.com. Previously, he was a trending news editor at Verizon Media, where he covered entrepreneurship, lifestyle, pop culture, and tech. He was also an assistant web editor at Architectural Record, where he wrote on architecture, travel, and design. Chan has additionally written for Forbes, Reader's Digest, Time Out New YorkHuffPost, Complex, and Mic. He is a 2013 graduate of Columbia Journalism School, where he studied magazine journalism. Follow him on Twitter at @jchan1109.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

I Tried Buying a Car on Amazon. Here Are the Pros and Cons.

Amazon Autos just launched, and users can buy a new car online. Here's how it works and what needs to improve.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Starting a Business

Nearly 50% of America's Workforce Has a Secondary Source of Income or Side Hustle. Here Are 7 Steps You Should Take to Create Lasting Value for Yours.

Today's entrepreneurs have the opportunity to generate long-lasting supplementary income if they take these steps.

Business News

Barbara Corcoran Says the Best Entrepreneurs Are Good at This One Thing

Real estate entrepreneur and investor Barbara Corcoran says a few key traits prove effective when starting a business. Here's her top pick.

Growing a Business

How to Prepare Your Small Business for Impactful Investor Partnerships That Go Beyond Funding

Here's how investorpreneurs transform startups with mentorship and strategic investments.