City in Brazil will help improve the quality of life for families

Helping families with basic necessities so that they can invest more time and energy into their health, happiness, and interests is a win/win for the families and the communities they live in.  That’s why a seaside city in Brazil has begun offering a stipend for lower and middle-class residents.

In an attempt to alleviate poverty, improve the quality of life, and to encourage more positive economic behavior, approximately $33 will be provided monthly to 52,000 residents Maricá (about one third of the population) according to Vox. 

Anyone who has been living in Maricá for three or more years and earn less than three times the minimum wage will be provided basic-income. This program will lift families living just below the poverty line above it. 

So far, the city has provided about half of eligible residents with the stipend; the second half will receive their benefits in early 2020. According to Vox, the money for the program will be coming from oil company royalties, which are allocated to the municipality, and will therefore not affect taxes. This source of income is considered stable, which is an important aspect of the program.

Maricá’s stipend is being provided in the form of a local currency (the mambuca) and on a pre-loaded card or through an application. Essentially, all aid will go through Banco Mumbuca which makes it trackable.

The program will be evaluated by researchers at the Jain Family Institute, a social and economic research organization based in New York and Brazilian academics, primarily Fabio Waltenberg at the Federal Fluminense University. they will have access to the data on what the benefit is spent on.

Paul Katz a researcher at Jain Family Institute, a social and economic research organization that is working with Professors in Brazil told Vox, “The idea is [the money] remains [in Maricá] and forms what the broader left movement calls a ‘solidarity economy.”

Since most of Maricá residents who work in the formal economy do so in the city of Rio de Janeiro, lots of money leaves the local community. When money stays local it goes towards building the community, jobs, infrastructure, and education. 

The current program is an extension of the Bolsa Familia income, which provides families with financial aid on the condition that they vaccinate and educate their children. It is paid to 26 percent of the Barazilian population.

The World Bank estimates that without the Bolsa Familia program, which currently assists over 46 million people, extreme poverty would be 50 percent  higher and income inequality would be 21 percent higher.

“This benefit is just much larger,” Katz says. “As of three years ago the average Bolsa Familia recipient households were getting 160 reais; that’s about four people, so about 40 reais each. You get three times that amount from this program — a much, much larger cash transfer than BF offers.”

There are several aspects of this program that make it stand out from similar initiatives, making it a powerful case-study for other countries and municipalities that would want to replicate it, such as the quantity of beneficiaries; the way its allocated; and the local currency. 

Barcelona, Spain and Stockton, California have both recently completed pilots that also provide basic-income to eligible residents according to Business Insider. As more data is gathered and analyzed, researchers and policy-makers will have a larger set of tools to help disadvantaged families leave the cycle of poverty. 

While Finland and Kenya have similar pilot programs, neither one compares to the size of Maricá’s; Finland provides income aid to 2,000 and Kenya to 26,000. 

There are several aspects of this program that make it stand out from similar initiatives, making it a powerful case-study for other countries and municipalities that would want to provide basic income in a way that also helps local communities.