Philadelphia Weekly

Illustration by Tim Gough

A couple months ago Philadelphia's Office of the Controller announced it had completed a report asserting the feasibility of a paperless payroll system for city employees. The Paperless Pay Intiative, now on the mayor's desk for potential approval and implementation, may, at first glance, seem like a simple cost-cutting measure or "green" initiative. And it would save half a million dollars and six tons of paper each year.

Yet the implications of moving the city payroll to direct deposit are more complex, in part because of race, class and the desire some residents have to remain under the radar.

The Initiative is based on the direct deposit systems the city already has in place. It won't threaten any jobs or alter existing infrastructure. Seventy-three percent of city employees already receive their paychecks via direct deposit.

But the remaining 27 percent represent a serious challenge. As the Inquirer reported last month, city and federal officials are spearheading the Bank on Philadelphia program to get low-income residents off the list of the "unbanked," those 81,000 residents without bank accounts. If many city employees are among them, the switch to the paperless-pay system will be impossible.

United Check Cashing (UCC), headquartered in Philadelphia, declined comment for this story. But with roughly 20 locations in the area, the company would stand to lose clientele if the city went paperless.

The bustling UCC location at 1001 Market Street provides a glimpse into why people might prefer to use a check-cashing place rather than a bank. It offers prepaid phone cards, home phone connection, money orders, bill-pay options and lottery, among other things.

These all cost a small fee, of course, so in addition to the fee for cashing a paycheck, city employees may be as much as $30 in the hole before their money sees the light of day. And Philadelphians spend millions at these types of check-cashing services per year.

Temple University went paperless back in January. Debit cards were issued to Temple employees who preferred not to use direct deposit, in addition to a self-service website and virtual payroll stations that allow employees to monitor information like their leave status. The Paperless Pay Initiative would mimic some of these options, including online-banking training seminars and employee lounge self-serve stations.

None of these options, however, eliminate the need for a bank account--especially in a digital age.

"We like to do things on a payroll-deducted basis," says Phillip Caldwell, whose firm, Archer Benefits, provides employer supplemental insurance. "We can do it the old-fashioned way, but it's cumbersome. There are more moving parts. And I do hear, 'I don't like banks' pretty often, and I understand where people are coming from, to an extent, because this is an identity-theft world we live in."

But Caldwell adds that not having a bank account is unlikely to save anyone from being the victim of identity theft; it's more important to know what the options are if, in fact, it does happen.

"You know how they say, 'Just because you're paranoid, doesn't mean somebody's not out to get you?'" Caldwell asks. "So the fears are not unfounded. We just can't avoid this part of the system. At some point you've got to participate if you're going to be able to function," he says.

Then there's the issue of many city employees being in the working-class tax bracket, especially African-Americans and Latinos, who simply don't have access to banking services others take for granted.

"It is a class and race issue," says Caldwell, who is African-American. "You figure there are no bank branches or ATMs in our neighborhoods. These folks may not have computers at home, either. I do a lot online, transferring and checking balances. This is old hat for me. But it makes me sad that unfortunately many of us African-Americans in this city fall under the poverty line and are having these issues."