Philly to pilot a guaranteed income experiment, giving cash to some needy residents

By Laura BenshoffJanuary 31, 2022


The skyline of Center City, Philadelphia, can be seen from the banks of the Cooper River in Camden, N.J.(AP Photo/Tom Mihalek, file)

Cash is king. That’s the takeaway as Philadelphia is set to soon join other U.S. cities in attempting an experimental economic mobility pilot that will give recipients cash payments, no strings attached. As early as March, Philadelphia will start giving up to 60 people $500 a month, for at least 12 months. Recipients will be selected from a pool of 1,100 people who have received federal support through TANF, or Temporary Assistance for Needy Families, for five years. A total of $322,000 will cover the costs, drawing from existing TANF funds.

The key distinction from traditional social programs, such as TANF, said Dr. Nikia Owens, Philadelphia’s deputy executive director of family supports & basic needs, is “they don’t have to do anything extra for this money.” In recent years, universal basic income or guaranteed income programs, popular in other parts of the world, have gained traction in the United States. Former Democratic presidential candidate Andrew Yang campaigned on the concept, and Stockton, California has been experimenting with giving some residents monthly cash stipends since 2019.

Preliminary findings from that experiment showed recipients’ mental health and prospects for finding full-time work improved. The thesis is simple: traditional welfare programs with stringent eligibility rules do not actually move people out of poverty, but unrestricted cash can. “When you invest directly into the individual, those individuals are more likely to succeed,” said Owens. Critics of unrestricted cash, such as U.S. Sen. Joe Manchin (D-WV), argue that it disincentivizes work and has the potential to be squandered.

However, research shows it has a neutral effect on whether or not people work and that most people spend it on basic needs. Cities from Chicago to Cambridge, Massachusetts, are also dipping a toe in with programs that tweak traditional welfare payments in order to give recipients unrestricted funds, attempting to test that thesis in the United States further. Philadelphia mayor Jim Kenney is a member of Mayors for a Guaranteed Income, a coalition of Democratic elected officials around the country committed to trying out such programs.

More: https://whyy.org/articles/philly-to-pilot-a-guaranteed-income-experiment-giving-cash-to-some-needy-residents/