Starting in April, families from Philadelphia will begin to receive $500 monthly directly to their bank accounts. But there is a small problem – the program will not be available to everyone, only some lucky people will receive money.
Among other programs, launched by this organization, there is the one for receiving $500 monthly which has been called a guaranteed income pilot program. On the 6th of April, the organization inaugurated the program thus marking the official beginning of the effort to help low-income families become more financially prosperous.
But what is the nature of this “jumpstart” program? Who will receive the money? And how does it differ from, let’s say, government-issued checks?
Lets get a more profound understanding of it.
Unprecedented Financial Aid
It is known that Philadelphia is the largest city in the United States, but it also becomes the city with the worst poverty rate. Apparently, the city is ranked the last in economic mobility among all the top 10 cities in the United States, as revealed from the Urban Institute survey. It’s tough to climb up the income ladder because the people in the city with little money and lots of problems are trapped in this situation.
In order to fight the long-term challenge of economic inequality in the city of Philadelphia, a community-driven organization Xiente has built the confidence to run a program of this type as a pilot project over a period of 14 months. Moreover, this program has been organized with the collaboration of the University of Pennsylvania’s Center for Guaranteed Income Research, where also experts in the field, who are every now and then, from various countries all over the world, are working on the study of such types of models.
As per the information on the Xiente website, the idea behind the article is to provide a short narrative of a family getting unmarked money every month to be able to realize their dreams – no hard and fast rules, no work thingy.
Who Will Receive the $500 Payments?
Presently, the program has identified only ten families to be a part of it. These families will be getting $500 every month for 14 months — and they were not supposed to pay back the money or comply with any job seeking rules.
But, there is a strict set of rules to determine who is eligible.
For this, a family has to:
- Dwell in Philadelphia
- Exhibit a household income within 30% to 60% of the Area Median Income (AMI)
- Actively participate in other Xiente programs
- Comply with a certain family structure (for instance, single parents with children)
So, a family with four members needs to have an annual income between $34,400 and $68,820, taking the figures from HUD’s income data into consideration.
With the future in mind, Xiente could possibly increase the household number to 500. They have the desire to help 500 families in the next few years.
Not Just Cash – Other Benefits Included
Not only will each family get the money transferred every month but they will also be provided with:
- Housing support from the “Mi Casa” initiative of Xiente
- A personal financial mobility coach
- Assistance from a HUD-certified housing counselor
This additional help is expected to facilitate families in acquiring new skills of efficient money management and take advantage of the available career growth opportunities.
Michelle Carrera Morales, Xiente’s CEO, stated the following words in an interview with WHYY, “We need to figure out how to do things differently… There comes a time when we need to believe in people according to who they are and leave them to operate as they make the right decisions.”
How did basic income become different from welfare?
Basic income is given to citizens without restrictions, unlike traditional welfare programs. This makes unpaid work, medical tests for drug use, and spending restrictions the following:
- There was no need for people to work.
- No one was forced to test their bodies for drugs.
- No one’s spending had to be questioned.
According to the proponents of this system, citizens are provided with the opportunity to make wise financial decisions, whereas in previous systems families were penalized if they had a substantial source of income.
Detractors of the program argue that it is not affordable on a nationwide level and are worried that it creates a dependence on free money.
However, the previous City-Based Income Guarantee programs have provided encouraging results in other U.S. cities, and the ban of guaranteed income programs in Texas and Iowa Republican-controlled states has initiated national discourse.
Who are the Major Stakeholders in the Pilot?
This program is not funded by the government, but through the efforts of the following organizations:
- The Vanguard Group Foundation
- Local Initiatives Support Corporation (LISC)
These organizations are in support of a national program, and they are performing a pilot to see the effects of this policy in the US.
What’s the process from this point?
Researchers from the University of Pennsylvania are in charge of the outcome of the program. Also, they are checking whether the families will carry out the following tasks:
- Double their income
- Migrate
- Save
- Pay less
- Recover
- Get stressed less
- Live more comfortably
If the results are good, other cities might get involved with pilot projects right away.
What is the Significance of This?
That $500 that you are getting is no more money. It is more important in the context of a reimaged America’s fight against poverty.
Although we are limited to a number of families for which we can provide, if it becomes successful, then the future of public aid and low-income support might get reshaped.
For instance, when the program expands, a larger number of families will be eligible; currently, however, Philadelphia is the focus of everyone’s attention.
Is it possible that this small pilot program will make a real impact on people’s lives — or rather, it will only create an issue for the whole country?
