New Orleans to pay teens $350 a month in financial literacy push

New Orleans to pay teens $350 a month in financial literacy push

Greater than 100 younger folks in Louisiana will obtain $3,500 subsequent yr underneath a financial literacy program from the Metropolis of New Orleans. 

Metropolis officers said Thursday that 125 residents between the ages of 16 and 24 will obtain 10 funds of $350 beginning subsequent spring. The cash can be loaded onto an ATM card supplied by Black-owned on-line financial institution Mobility Capital Finance. New Orleans Mayor LaToya Cantrell stated throughout a press convention Thursday the playing cards will go to residents who’re unemployed or not attending college. 

The objective, metropolis officers stated, is to handle the “unbanked” downside plaguing the Massive Simple. The “unbanked” is a time period the financial companies business has adopted to describe adults who earn cash however don’t use financial institution accounts to assist them handle these wages. 

One in every of 20 U.S. households are at present unbanked, in accordance to a June study from the Federal Reserve Financial institution of New York. Louisiana has one of many highest percentages of its state inhabitants that is unbanked: 15%, according to financial advocacy group Prosperity Now, second solely to Mississippi, at 16%.

The unbanked concern is impacting communities of coloration, Cantrall stated in a assertion, including that the ATM playing cards “will address racial and wealth gaps that we know are prevalent right here in our city.”

New Orleans received a $500,000 grant from Mayors For A Assured Revenue in December and that cash can be used to fund the playing cards. Mayors For A Assured Revenue is a coalition of U.S. mayors who’re pushing for a nationwide common fundamental revenue program. 

Newest experiment in Common Fundamental Revenue

Certainly, what’s taking place in New Orleans is the newest instance of common fundamental revenue experiments taking place throughout the nation. 

The idea of a common fundamental revenue, stretching again to the American Revolution period, is that each citizen in a given society receives a sure amount of cash to spend on no matter they need. It is designed to battle poverty by placing money instantly in the arms of those that want it essentially the most. 

In New Jersey, the Newark Motion for Financial Fairness is a two-year program that pays a random number of 400 residents, ages 18 and older and with family incomes which might be 200% under the federal poverty degree, a sum of $12,000 every, over two years. Half of these people will obtain $500 month-to-month funds, with the opposite half receiving 4 funds of $3,000, paid out semi-annually. Mayor Ras J. Baraka launched this system earlier this yr and instructed CBSN’s Tanya Rivero that knowledge generated from this system can be used to push a nationwide mannequin. 

In California, the Stockton Financial Empowerment Demonstration gave greater than 100 randomly chosen metropolis residents dwelling under the poverty line $500 month-to-month funds for 2 years. This system demonstrated larger charges of full-time employment and different optimistic impacts on members, together with improved psychological well being outcomes, financial researchers discovered. This system ended in February. 

Denver, Gainesville, Florida; Gary, Indiana; Jackson, Mississippi, and St. Paul, Minnesota even have — or plan to launch — common fundamental revenue applications. 

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