Newark to Seek $5M From Donors for Guaranteed Income Pilot Program
NEWARK, NJ — Newark is one step closer to its highly anticipated Guaranteed Income Pilot Program following the release of a report by the city, the Jain Family Institute and the Economic Security Project outlining findings and recommendations that would put more cash into residents’ hands.
Mayor Ras Baraka first broached the idea of a universal basic income pilot program at a 2019 State of the City address, saying it would be a welcome experiment in Newark, where more than a third of residents live below the poverty line. Universal basic income is a government benefit that aims to reduce income inequality through direct cash infusion.
More than a year later, the report completed by the city’s special task force is positioning Newark to join a national body of research on guaranteed income. The pilot program would focus specifically on residents struggling with housing insecurity, according to the city.
“What we really want to do is add to the national body of research and put Newark on a national stage,” said Kevin Callaghan, Newark’s philanthropic liaison. “This is Mayor Baraka entering a conversation and saying this is something that we support, and the top recommendation of the report is that there should be a federal guaranteed income policy.”
With the support of JFI and ESP, two internationally recognized research groups, Newark will begin to cast a line to national foundations and donors to fund the pilot. The report estimates anywhere between $4.5 million to $12 million based on three studies, but Callghan put the sweet spot around $5 million for meaningful results.
Estimates say that a Newark family would need $63,000 a year to meet its basic needs, according to United Way of Greater Newark.
As more than a million New Jerseyans remain on the unemployment rolls in the wake of COVID-19, the prospect of universal basic income for Newark comes at an opportune time. At a time when the national conversation around stimulus payments is amplified, Newark is one of many cities calling for more direct cash support for citizens all the time, not just during a crisis.
“People do not have enough income coming in to take care of basic needs. These conditions were unacceptable before COVID-19 struck, and they are intolerable now. No person should have to deal with these stresses, and that is why we in Newark remain committed to pushing such a policy,” Baraka said in a statement.
Among the recommendations made by the city’s report are for benefits to be unconditional, automatic and cash-based with the distribution of funds through regular bank accounts, rather than prepaid cards. This model, according to the report, increases agency by retiring the idea of financial insecurity as a matter of personal responsibility and reducing overall stigma.
The report also recommends that Newark reassess its municipal fines and fees so as not to give with one hand and take away with the other. While some municipalities may push back at the idea, Callaghan says the measure could actually save money.
“It’s not saying ‘No more fines and fees,’ it’s saying, ‘Maybe we need a payment plan.’ There are other penalties that might hurt people from paying. Other cities have actually found savings in the ways that they enforce fines,” he said.