It is long past time for the city of Philadelphia to implement a guaranteed basic income program for families living below the poverty line. Studies have shown the efficacy of such programs to not only deliver underprivileged and underserved families out of poverty, but to also stimulate local economies via the increased purchasing power of those receiving the benefits.
A 2024 study by the Inclusive Economy Lab at the University of Chicago identifies over 120 guaranteed basic income pilots across the country. Philadelphia has seen its share of pilot programs, including a Philly Joy Bank plan aimed at reducing racial disparities in birth outcomes by offering 250 Philadelphia mothers additional assistance during their pregnancies. The city also began something akin to a basic income program that offered 51 recipients of E-TANF support an additional $500 per month for one year. A second group of 239 families received an additional $50 per month.
While these programs have undoubtedly provided needed assistance to Philadelphians, they are smaller plans aimed at specific groups. A larger scale implementation is required to realize the needed improvements on the socioeconomic status of the city’s most vulnerable residents. This is imperative now, as inflation has limited purchasing power, the city continues to increase taxes and fees on residents, and wages have stagnated. Over the last five years, Philadelphians have seen a 50% increase in water rates, three property tax reassessments that have led to higher taxes, and other utility rate increases.
Guaranteed income programs can also have a significant, positive impact on health outcomes, as recipients are less likely to have to choose between basic necessities such as food and medical care. A study reviewing the efficacy of an Alaskan program called “The Alaskan Dividends Fund” which made direct cash payments to needy residents, found that “a system of regular, secure cash payments to all citizens or permanent residents, may have the capacity to generate substantial health benefits across the population at national level.” Philadelphia’s own health department acknowledges the connection between economic disadvantage and negative health outcomes.
Poverty limits access to the resources needed to live a healthy life, such as safe housing, safe neighborhoods, educational and employment opportunities, and healthy food. Limited access to these resources can contribute to higher rates of mental and physical health concerns, chronic and infectious diseases, and early death. It should, but often doesn’t, go without saying that interventions such as a guaranteed basic income program for those at the highest risk of poverty would lower costs in numerous areas, including health care, where those without often access the system at the most expensive entry point (emergency rooms). Unable to pay themselves, these costs are then spread throughout the system, affecting all payers. (This is also an excellent argument for universal healthcare, a benefit enjoyed by every other first world country which has raised health outcomes in those countries far beyond our own).
Almost three years ago, Hall Monitor published a piece calling for Philadelphia to institute its own form of the Child Tax Credit. This program would target children living below the poverty line, offering an extra $100 per month per child. Combining this with existing programs, child poverty could be cut in half if such a proposal was implemented. While it may not sound like a significant amount, and extra $100 per month per child can go a long way. It can be the difference between having to choose between food or other needs such as preventive healthcare or clothing. The total annual cost of this program would have been $144 million. In a nearly $7 billion budget, finding$144 million is not an exceptional lift. Furthermore, the multiplier effect of the dollars spent on this program would resonate throughout the local economy. The cash would be used by families in their own communities, contributing to local businesses who will then use that same money to support other local businesses. Building a program such as this is an economic engine that will serve our most vulnerable residents, and the cash is a fuel that will power communities to develop and strengthen economically.
A program such as this would have tremendous benefits throughout the city. A more hefty investment, such as a guaranteed basic income program for those living below the poverty line, would have an even greater economic benefit across the city. Combined with other initiatives such a public bank and increased investment in other targeted interventions.
In the coming weeks, Hall Monitor will break down the costs and implications of a guaranteed basic income program and how it would be beneficial to not just those living in poverty, but the entire city population in general. We will be publishing a series of articles highlighting programs that could help Philadelphia break the cycle of generation poverty once and for all. If you have any suggestions for programs you would like to see highlighted, please let us know.
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