Economically disadvantaged Americans often turn to guaranteed basic income (GBI) programs to help them weather economic challenges and meet their basic needs, and this approach is recognized as an effective strategy for addressing poverty.
Ann Arbor, Michigan recently introduced a tailored GBI program for local entrepreneurs, small business owners and gig workers, in an effort to reinvent the way it provides income assistance to low-income people.
The program, called “Guaranteed Income for Ann Arbor Growth,” allocates $528 per month for 24 months to 100 eligible residents, allowing them to use the funds as needed with no obligation to repay. These payments are intended to give recipients more room to cover day-to-day expenses and focus on developing or launching their businesses.
The program, which launched in January, is expected to provide a total of $12,672 per recipient by the end of 2025. To be eligible, Ann Arbor residents must earn at or below the federal poverty line, which is $32,805 for an individual and $67,500 for a household of four.
The program, funded by $1.6 million from the American Rescue Plan Act allocated to Ann Arbor three years ago and a donation from the Ann Arbor Community Foundation, will also involve researchers from the University of Michigan who will gather insights from participants through surveys.
Eligible participants include budding entrepreneurs, aspiring entrepreneurs, part-time workers, independent contractors, local artists and musicians, and others, as long as their income falls below specified thresholds.
Program organizers said they hope the effort will highlight the effectiveness of GBI’s business support by highlighting the challenges low-income people face in pursuing their entrepreneurial dreams.
Ann Arbor was selected for the program due to its thriving small business ecosystem, with nearly half of Michigan’s startups based in the city. Washtenaw County is home to 69 venture-backed startups and has seen a significant increase in startup activity since 2014, making Ann Arbor a hotspot for innovation and entrepreneurship.
The city has a large concentration of graduate-educated residents, many of whom are University of Michigan alumni, making the city fertile ground for future startup success.
Specialized income programs like GBI are spreading across the country, including efforts in Flint, Atlanta and Denver that target specific demographics, but some lawmakers oppose them, saying they could encourage dependency on government assistance.
States including South Dakota, Iowa and Arizona have begun efforts to ban GBI programs, reflecting ongoing debate about the role of government assistance in eliminating economic inequality.
