Stimulus Update: This Major American City Wants to Send $500 Monthly Payments to Its Residents

Low-income St. Louis families may be in for 18 months of guaranteed payments.

St. Louis Mayor Tishaura Jones announced in early October that the city plans to send $500 monthly payments to approximately 440 families for the next 18 months. While the program had not yet been approved at the time of Jones' announcement, it won initial approval last Friday at a meeting of the Board of Aldermen.

Direct stimulus payment qualifications

To qualify for a monthly $500 payment, eligible recipients must meet two criteria: `

1. Be considered low income (although no precise income guidelines have yet been released).
2. Be a parent or guardian of a child in the St. Louis Public School District.

Source of the money

Like most large cities, St. Louis still sits atop millions of dollars in local pandemic recovery funds provided by the federal government at the peak of the COVID-19 pandemic. Promoters plan to allot nearly $5 million of those funds to the families most in need.

The goal

Those lawmakers who support the initiative say it aims to reduce gender and racial inequality in the city, and that by investing in the families of school children, they're investing in the future of St. Louis.

By targeting the checks toward the poorest families in the city, legislators may be able to side-step the question of providing funds to those who already have a healthy checking or savings account.

The program is not only designed to be targeted but also to last for a set amount of time, giving families time to plan for life post-stimulus.

Opposition

While monthly stimulus payments garnered strong support from the Board of Alderman's progressive bloc, the plan is not without detractors. For example, Alderman Tom Oldenburg, of St. Louis Hills, does not believe monthly payments should be included with a larger bill on the table. This bill budgets funds for childhood education, healthcare centers, and the expansion of a youth summer jobs program.

According to KTVI in St. Louis, the alderman is uncomfortable with the idea of sending cash to people with no guidelines as to how it must be spent. For example, Oldenburg suggested the money go toward helping low-income families buy a home or vehicle.

Not the first program of its kind

The bill sponsor, Alderman Shameem Clark Hubbard, points to research on a similar program in Stockton, California. When the city of Stockton distributed $500 checks per month to 125 people randomly chosen from neighborhoods at or below the city's median household income, all kinds of good things happened.

Funds were sent with no strings attached, no work requirements, and no limits on how recipients could spend the money. Researchers studied how this extra cash impacted those accustomed to living without.

One of the most surprising findings was that those who received cash payments managed to secure full-time jobs at more than twice the rate of those people included in a control group who did not receive monthly payments. Within 12 months, the number of cash recipients who had landed full-time jobs increased from 28% to 40%. Members of the control group experienced only a 5% boost during the same period.

According to an NPR report, critics of such programs worry that they eliminate the incentive to work. However, experts find that the opposite can be true. People who feel more financially stable are not only inspired to work better and smarter, but they're able to spend more time with their families and help build their communities.

The bill requires one more Board vote for final passage.