Ann Arbor Michigan

Ann Arbor, Michigan, USA 2020 - Michigan Theater on State Street downtown during sunset with cars

(The Center Square) – As housing and gas prices continue to rise amid record 40-year-inflation, two Michigan cities will spend federal COVID money to pay some residents directly.

The cities of Lansing and Ann Arbor together plan to spend millions of taxpayer dollars from the American Rescue Plan Act on guaranteed basic income programs.

Ann Arbor Communications Manager Lisa Wondrash told The Center Square in an email that the City Council approved $1.6 million for the pilot program on April 4, 2022. The program will provide direct aid to a group of families for three years.

Ann Arbor will work with community partners to create program criteria in the coming months.

In April, The Center Square reported Lansing’s $1 million planned guaranteed basic income program.

It’s unclear how the governments will determine project success or failure, or which group of people it should pay.

Whether the government is handing out taxpayer money to residents or nearly $300,000 to private businesses, the same question remains: which people or companies should get the money, and why?

Those living below the poverty level receive government assistance that adjusts to inflation, so some argue that the government assistance should flow to those living just above the line.

Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, wrote in Reason that previous studies found that UBI doesn’t compel people to work.

Despite having a population of 10 million, Michigan’s labor force is only about 4.7 million people.

Rugy says that a UBI heaped onto already-existing social safety nets would only make government programs more inefficient and expensive.

The city of Detroit doesn’t have any plans to enact a universal basic income program. Still, Councilmember Coleman A Young II has supported a $3 million pilot program that would give 125 families $500 for 18 months.

Many other local governments nationwide use similar tailored programs, with a mix of private and public funding, including:

  1. Los Angeles, California.
  2. Oakland County, California.
  3. Sacramento, California.
  4. Pittsburgh, Pennsylvania.
  5. Minneapolis, Minnesota.

The Federal Reserve of Minneapolis will evaluate its city program.

Staff Reporter

Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.