Ann Arbor to give away $500 a month to 100 aspiring entrepreneurs at poverty line for 2 years

Ann Arbor is giving away money to some of its residents as part of a social well-being experiment.

The $530-a-month move was approved by the Ann Arbor City Council for 100 applicants below the poverty line for two years, and watch how much of a difference it can make in their lives.

What is happening in Ann Arbor is part of a nationwide movement and guaranteed income, but here they are doing it with a twist, qualifying will include entrepreneurship.

Professor Kristen Seefeldt, University of Michigan associate director of poverty solutions talked about the potential impact for aspiring business owners who qualify.

"Somebody who really is trying to get a business off the ground to someone who is doing nails and hair out of their kitchen," Seefeldt said.

"So if you are a gig worker, you have a home-based business, child care provider, braiding hair, baking cakes, folks who have to supplement their income," said Linh Song, Ann Arbor councilwoman.

Those are the applicants this program is targeting, once the Ann Arbor residents get that money, there are no restrictions on the money - Songh said.

Some critics say that makes this program prime for fraud - but Councilwoman Song says the reward outweighs the risk.

"For this, we trust people to use the money for emerging needs, for emergencies," she said.

Other critics ask why not use the money for other projects in Ann Arbor.

The answer to that lies in where the money is coming from.  This guaranteed income program uses federal Covid relief money. If the city doesn't dedicate where to spend it by 2024, they lose it.

"U of M Poverty Solutions presented this proposal to the city, saying we can actually do a research study and administer the grant for folks who are entrepreneurs," who said.

And that's the other part of the program. University of Michigan hopes to study the pros and cons of giving away $500 a month.

"We want to be following folks who participate in the study, we'll do surveys with them, in-depth interviews with them not just looking at how they are spending it, but what the money means for their well-being."

The City Council is still working on streamlining the application process with the hope to have it running this year and writing checks by January 2024.

Linh Song, Ann Arbor councilwoman, left, and Professor Kristen Seefeldt.

Linh Song, Ann Arbor councilwoman, left, and Professor Kristen Seefeldt.