Economics in Brief: As Part of Poverty Reduction Strategy, Philadelphia Floats Basic Income Pilot
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Economics in Brief: As Part of Poverty Reduction Strategy, Philadelphia Floats Basic Income Pilot

 Also: Another bank is investigated for opening fake accounts, and a real estate investment fund targeting Opportunity Zones loses one prominent investor.

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As Part of Poverty Reduction Strategy, Philadelphia Floats Basic Income Pilot

Philadelphia unveiled a ‘Poverty Action Plan’ this week that aims to lift 100,000 residents out of poverty by 2024, WHYY reports. The recommendations include job training stipends, adult education opportunities, childcare, and — yes — basic income.

Philadelphia, which has a poverty rate of 26 percent, has tried strategies like this before, but a wide coalition of groups has signed onto this new plan, including the Philadelphia Chamber of Commerce, business owners, the United Way of Philadelphia and South Jersey and elected officials at the city and state level. Mayor Jim Kenney says the broad coalition gives the plan a better chance of succeeding.

Council President Darrell Clarke wouldn’t say how much it would cost to implement the plan (“Stay tuned,” he told WHYY).

As for the basic income pilot, specifics were also lacking, but Councilmember Maria Quiñonez-Sánchez, co-chair of the poverty committee, was quoted in a separate WHYY article saying that she was hoping the recipients of the money would be “returning citizens, foster kids [for example].”

Fifth Third Bank Being Investigated for Possible Fake Accounts

Fifth Third Bank announced in a securities filing this week that the Consumer Financial Protection Bureau intends to file an enforcement action against the bank for “alleged unauthorized account openings,” American Banker reports. That’s the same scandal that the CFPB cracked down on Wells Fargo for in late 2016. The bank says it plans to fight the action.

Graham Scott Steele, director of the Corporations and Society initiative at Stanford, told American Banker that Fifth Third “always had a reputation for being aggressive” in its sales practices.

The CFPB is also investigating Bank of America for similar practices, reports.

Jared Kushner Divesting From Real Estate Investment Fund

Jared Kushner is selling his stake in a real estate investment firm that hoped to profit from the Opportunity Zone tax break his father-in-law enacted, the New York Times reports.

A spokesman for Kushner told the Times that his involvement in Cadre, which he helped found in 2014, was “complicating” efforts to bring in new investors.

“Jared does not want to inhibit Cadre’s future business decisions,” the spokesman said in a statement to The Times.

It was unclear, the Times said, how much Cadre had invested in opportunity zones or how those investments had affected Kushner’s stake, which is valued in financial disclosure forms between $25 and $50 million. Kushner did get a “certificate of divestiture” from the Office of Government Ethics, which allows him to defer paying any capital gains tax on the proceeds.

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter. The Bottom Line is made possible with support from Citi.

Tags: philadelphiapovertybanksopportunity zonesuniversal basic income

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