‘Equity is about money’: St. Paul Mayor Melvin Carter on the city’s guaranteed income experiments, home-buying assistance

Since November 2020, the city of St. Paul has launched four separate pilot programs to study what happens when the government sends money to very low-income residents with no strings attached: a “guaranteed basic income.”

Mayor Melvin Carter has become a prominent advocate for guaranteed income stipends — and not just in Minnesota.

“Have you seen the reports from Stockton?” the 44-year-old DFLer asked, leaning forward in a chair in his wood-paneled office at St. Paul City Hall, referring to the central California city’s groundbreaking experiment with guaranteed income stipends.

The results in Stockton, Carter said, “are like, stupid positive, right? It’s ridiculously correlated to positive outcomes [like] social and emotional wellness and even increased employment opportunities.”

Carter has said early numbers from St. Paul’s first guaranteed income pilot — which gave 150 families $500 per month for a year-and-a-half — hint at similarly-positive outcomes. St. Paul has also already launched three more experiments with guaranteed incomes, including one aimed at the parents of very young children. (Minneapolis, by the way, launched its own pilot this summer.)

Carter sat down with MinnPost to discuss why he champions guaranteed income programs, as well as a few other priorities. The interview has been edited for length and clarity.

MinnPost: The median income of participants in your first pilot was $12,000 per year. Few people seem to understand what it’s like to live on that amount of money. 

Melvin Carter: Exactly, and in truth, there’s nobody in the world who could live off $12,000. Donald Trump could not manage money the way low-income single moms do; nobody’s more brilliant at money management than a low-income single mom.

One of the biggest trolls on this work is, you hear people say, ‘Why would anybody work anymore if you’re giving away free money?’ In actuality, they found in Stockton that people work more. Ask folks why and it becomes really clear: ‘I fixed up my truck so I could go to work,’ or ‘I put my child in child care so I could go to work.’

So our second pilot was geared around artists. A third one was geared around immigrants and refugees. Then both the first and the fourth initiative — the pilot we just launched — are subsections of our College Bound St. Paul initiative. So all the families have very low incomes and very young children born January 2020 or later.

The cohort we just launched is a study of 1,000 families, divided into three groups:

• Every child born in our city get now automatically starts life with $50 in a college savings account — and the control group is just that: $50 in college savings accounts.
• In the first experimental group, 333 families receive $50 in the college savings and a $1,000 boost to their college savings account.
• In the second experimental group, 333 families get this $1,000 boost in the college savings account plus $500 a month for two years.

I’m a national co-chair and one of the founding members of Mayors for Guaranteed Income. As a part of this work, we created a research center to say, ‘Don’t take our word for it.’ Let’s create an independent third party to conduct independent empirical research on the impacts of this work. Former Stockton Mayor Michael Tubbs — I heard him say once that getting it right is more important than being right.

MP: This is my big question: You’ve got a smattering of cities around the country that have done similar pilot efforts, providing what supporters could call proofs of concept for guaranteed income — what’s next? Is the future more pilot programs? Or is a priority winning over critics? Or is the next step something even more ambitious, like overhauling state or federal welfare programs to include more guaranteed income initiatives?

MC: I would argue we don’t put enough resources into supporting folks, so it isn’t just a matter of organizing those resources differently. I don’t think anybody’s arguing we put enough money into housing or food supports, or child care support, or health care supports, etc.

In the wake of the pandemic, we as a country increased the federal child tax credit and brought hundreds of thousands of kids out of poverty — and then we let it expire, and let those children and adults slip right back into poverty. A policy like that is very related to what we’re trying to do.

Right now, [Gov. Tim Walz] has a proposal to significantly expand the state-level child tax credit in Minnesota. We see policies like that as really building on what we’re demonstrating, which is if you give low-income families cash, they spend on rent, or buy bicycles for their kids, or groceries, and do all the same stuff we would.

As I have said from the beginning, I’m not arguing that St. Paul — within the context of our local property tax base — has the means to do something at scale, on a sustainable basis. I don’t think there’s many cities who could. We do have the ability at the state and federal levels to pass policies like this.

It’s incredible to me to compare where we are today to where we were five years ago. Five years ago, Mayor Tubbs was this voice in the wilderness doing this guaranteed income research that everybody looked at like, ‘That’s crazy,’ and kind of off-the-wall. Today, there are over 50 pilots around the country that have moved a significant amount of money to a significant amount of people at a time of the greatest need of our generation. That in and of itself is very worthwhile.

Anti-poverty initiatives haven’t worked because they’ve been trying to solve for the wrong problem. When we say, ‘You can only spend this on this, or I’m gonna decide — from City Hall — what you’re gonna spend this money on,’ we’re saying, ‘We know better than you how to how to raise your children, or what your family needs.’ We’re saying implicitly that the cause of poverty is a lack of character or judgment among families who are low income, instead of recognizing that the cause is a lack of money. At the core, we’re demonstrating the impact that cash can have on people’s lives.

MP: Well, then, where do you think we’ll be five years from now?

MC: It’s a crazy question. Fundamentally I think we need a transformative, larger investment in low-income families, that as a country, and again, I think what we’re trying to demonstrate is that it’s a good investment that will pay dividends for us.

Our argument is going to be: In just the same way as we can find seemingly unlimited resources when we commit ourselves as a country to going to the moon or going to war, I would love to see us provide that level of mission clarity where the war on poverty is concerned.

MP: You’ve also launched the Inheritance Fund, which provides up to $120,000 for qualifying descendants of residents of the Rondo neighborhood — gutted decades ago by the construction of Interstate 94 — to buy a home in St. Paul. Do you see this as connected to that same idea as underlies the guaranteed income pilot?

MC: It’s a different piece, but it’s very much connected.

We’re really on this journey: ‘How do we help residents in our city as a means of economic development? How do we help residents keep money in your pocket, and achieve a goal like saving for college or starting a business? We’re gonna be talking this week about cooperative ownership models — cooperative, worker-owned businesses; resident-owned co-op buildings — and figuring out how we can facilitate wealth.

Equity is not about general feelings of fairness; it’s about money. It’s about people having access to assets that are appreciable and transferable. It’s about people being part of the decision-making process. And it’s about connecting our macro-economy to people’s ability to pay the rent.

In St. Paul, in 2020 — at the moment the pandemic began — in a city of 315,000 people, we had almost 100,000 claims for unemployment insurance. A staggering gut punch for a city like us, right? We saw our number of unsheltered residents increase by a factor of 10. That year, I saw an article that said CEO pay in Minnesota increased by 70%. Our chart economy is disconnected from people’s ability to feed their kids. 

So yes, the Inheritance Fund is all connected to the same wheel. We’re excited about something that’s pretty unprecedented. It feels like we’re going to create a new playbook.

MP: Where do you stand on the future of I-94? Are you in favor of building a lid over the route as the “Reconnect Rondo” group has advocated, or getting rid of I-94 altogether? 

MC: I love that people are willing to think differently and appreciate people’s willingness to think completely out of the box. I don’t know that I’ve seen the kind of plane landed on how you do that [get rid of 94].

I’m very much in the ‘Rondo land bridge’ camp. I have testified in the Legislature in favor of that concept. I remember old timers, when I was a kid, saying, ‘You know, the one thing they’re not making any more of is land, so if you get your hands on some land, don’t ever let it go.’ And it’s intriguing to me that through the land bridge, we’re literally creating more land. There’s enormous opportunity within that. 

MP: The other day, I watched you and Minneapolis Mayor Jacob Frey share the stage at a joint local Chamber of Commerce breakfast. I was interested to note that you highlighted progressive policies, like minimum wage increases [and a plan to increase the city’s sales tax] — and I thought, ‘Wow, this is a Chamber of Commerce event?’ It made me wonder about your relationship with the business community of St. Paul and how you sell the city to them. Do you simply feel comfortable saying that to them and don’t care about backlash? Is it reflective of a different kind of business community in this region?

MC: It’s not that I don’t care. It’s that I think our business community deserves to hear from me straight what our ambitions are for the city. If we’re planning to do something that can’t withstand critical questioning, then it’s probably not worth the paper that we’re printing on — so we welcome the conversation.

I think of it as ‘the St. Paul way.’ We raised the minimum wage through a task force that had union leaders and the Chamber of Commerce president sitting at the same table, going through the pros and cons, coming to a policy that maybe not everybody loved every aspect of, but that we decided as a community that we can stick with.

Our journey around reimagining public safety — the exact same thing: Black Lives Matter activists and the police union president at the same table, working through this thing. I think sometimes we end up in this space where we like to pretend that, ‘That’s the guy that wants more murders in our city,’ or ‘That’s the guy that wants fewer kids to graduate from high school,’ you know what I mean? That’s very, very rarely the case. 

Our goal is to really commit ourselves to inclusive decision making processes. It gives us an ability to do a set of work that just wouldn’t be possible. We’ve gotten a lot accomplished in this administration in five years, but the truth is, I don’t think that pace is accessible to us, without this focus on engaging people and bringing people into the work — because the body of work that I love to brag on, isn’t my work. It really is our work as a community.

[cms_ad:x104]MP: It’s interesting. Governing ‘by committee’ usually means moving slower.

MC: There’s an intriguing balance. The appetite for helping out in the city is enormous right now. 

Also, one of my rules is that I don’t ask for community engagement around a decision that I’ve already made. I don’t think that’s respectful or authentic. So for example, around minimum wage — there were folks involved in the task force who said, ‘Do we really need $15 an hour? What about $14.95?’ or something. But I said upfront, ‘It’s $15. That’s the number.’ Let’s figure out what the timeline is. Let’s figure out what the ramp-up is. Let’s figure out if there’s a difference between big businesses and small businesses — whatever it is. But the number was $15.

The other ground rule that we always tell the people is, ‘The same way you want the mayor to listen to you, your rent for being at this table is listening to other people around the table.’ If you want to be listened to, you have to listen, you’ve got to be engaged in the same way as you want me to listen to you. And it’s helped us to do things by committee in a way that’s actually action-oriented. You won’t hear anybody say, ‘We only had like token representation of this group or that group or this group,’ and the recommendations of I think all had upwards of 60% and 80% approval from the groups. So we’re proud of our ability to move about with a group of folks.