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Even for
public
servants
with the
best of
intentions,
the seeming
intractability
of poverty
in America
can be
awfully
discouraging.
Its causes
are complex
and past
efforts have
met with
limited
success.
Until
Hurricane
Katrina hit
land,
poverty had
been absent
from the
public
agenda for
so long that
there was
little
consensus
among
policymakers
in how to
respond. Not
only was the
toolbox of
effective
antipoverty
proposals
empty but
partisan
gamesmanship
often seems
to block
innovative,
good faith
efforts to
address it.
Yet
persistent,
concentrated,
and
intergenerational
poverty remains
a scourge upon
our prosperous
society, an
enduring
challenge for
policymakers of
all persuasions.
One of the more
remarkable
efforts to meet
this challenge
is being led by
New York City
Mayor Michael
Bloomberg, who
has decided to
make tackling
poverty one of
the core
priorities of
his second term.
With Democrat
Charlie Rangel
looking on,
Mayor Bloomberg
announced this
past December
one of the most
innovative
anti-poverty
efforts to
emerge in recent
years. While it
is too early to
predict the
ultimate fate of
this effort, it
has already
unleashed an
unprecedented
public private
partnership that
just might
create a model
for future
anti-poverty
initiatives
across the
country.
Rather than
identifying
amorphous
targets or
unattainable
goals, Mayor
Bloomberg
committed
himself to
remaking the
toolbox. And he
pledged $150
million a year
to do so, some
of it to be
raised in the
private sector.
Much of the
money will be
used to try and
test out new
approaches. At
the center of
the effort is a
newly-formed
city office,
called the
Center for
Economic
Opportunity
(CEO), which is
designed to
operate as a
combination of a
philanthropic
foundation and a
venture capital
fund. This
office will be
charged with
seeding
innovation by
supporting a
range of
experimental
programs. But in
addition to
investing in
R&D, the CEO
will be in
charge of
evaluating the
results, so
programs that
demonstrate
success in
reducing poverty
can be built
upon and those
that don’t can
be shut down.
This results and
evidence-based
approach is
gaining momentum
in other areas
of government,
increasingly
influencing
budget decisions
at the federal
and state level,
but the funding
of policy
innovation,
especially in
anti-poverty
program at the
local level, is
breaking new
ground.
Emblematic of
the search for
innovation is
the decision to
implement and
test one of the
more remarkable
anti-poverty
tools developed
in recent
years—conditional
cash transfers.
Piloted in
demonstrations
throughout the
world but
largely untried
in the U.S.,
conditional cash
transfer
programs (CCTs)
provide money
directly to
recipients when
they meet
specific
criteria. It’s
an incentive
program that
makes the social
contract
explicit.
Families are
rewarded for
their actions,
so they may
qualify for a
transfer when
they complete a
training program
or make sure
their children
go to school and
get vaccinated.
The idea behind
CCTs is to
replace the
traditional
welfare model of
donations of aid
with one that
allows
recipients to
invest in their
future. It has
already been
proven to work
in other places.
One widely
studied program
in Mexico, one
replicated
internationally
in over 20
countries, has
been credited
with improved
health outcomes
that have been
linked to
improved
educational
outcomes in
young children
and a reduction
in poverty at
the family
level.
To
implement and
evaluate this
approach in New
York City, Mayor
Bloomberg formed
a public-private
partnership in
March of this
year. The first
of its kind in
the U.S.,
Opportunity NYC
is a $50 million
effort that has
raised support
from a number of
foundations,
including the
Rockefeller
Foundation, the
Open Society
Institute, AIG,
and Starr
Foundation.
Designed with
input by MDRC, a
leading national
evaluation and
research firm,
the
Opportunity NYC
program will
include a sample
of approximately
5,000 families
throughout the
city — half of
which will be
part of a
control group.
The incentive-based
strategies of
the program will
focus not on
developing new
social services,
but on
increasing
participation
in certain
existing
programs and
taking actions
that have
already been
proven to reduce
poverty among
children and
families now and
in the long
run. Participants
may receive $50
to $300 for
meeting
specified
targets or
completing a
conditional
activity, and
families may be
eligible to
augment their
income $3,000 to
$5,000 per year
depending on the
activities and
family size.
Initially,
incentives will
focus on the
areas of
education,
health, and
work, but
poverty
advocates are
already
identifying
promising areas
to expand the
effort.
Another set of
early
investments will
focus increasing
the financial
capacity of
lower-income
households. A
first-of-its-kind
Office of
Financial
Empowerment is
being formed to
ensure that
families have
access to
information that
can maximize
their financial
health and
minimize the
likelihood that
they will be
subject to
predatory
schemes. This
will include
coordinated
information
campaigns to
publicize the
availability of
tax credits and
public benefits
which can
families get and
save financial
resources. The
idea is to
provide and
coordinate
access to asset
building
activities, such
as basic bank
accounts,
financial
literacy help,
and matched
savings account
programs.
An
additional plank
of the effort is
designed to help
families with
young child
enter and stay
in the work
force.
Recognizing that
child care costs
often impede
labor force
attachment, the
Mayor has taken
up an earlier
proposal of his
Democrat-led
City Council to
create a local
child care tax
credit that
could help
offset these
costs and make
work pay. The
proposed credit,
still pending
before the
council and
state
legislature,
would target
families with
children three
years old and
young which have
household
incomes less
than $30,000. It
is estimated
that this
proposal would
cost the city
$42 million a
year and benefit
almost 50,000
families.
This
initial round of
investments is
ambitious in
both its scale
and breadth—a
testament to a
driven,
second-term
mayor committed
to forging new
ground in some
difficult
terrain. And
yet, Mayor
Bloomberg is not
alone in his
decision to
focus on
combating
poverty or in
his search for
new, effective
ways to confront
it. Across the
country, mayors
are increasingly
turning their
attention to
these issues.
Los Angeles
Mayor Antonio
Villaraigosa
recently
convened a task
force of mayors
to develop a
forward-thinking
anti-poverty
action plan. The
mayors
acknowledged
that reductions
in poverty are
unlikely to come
from expanding
subsidies and
entitlement
programs, but
from revising
the way we use
public resources
to create a
lifelong ladder
of learning and
opportunity.
Specifically,
Villaraigosa has
called for a
revitalizing
system of work
skills and
training, an
expanded EITC to
make work pay,
and the
provision of
children’s
savings accounts
to provide a
platform to
build assets
over a lifetime
and learn the
basics of
financial
education.
Like
Bloomberg, these
mayors recognize
that there are
no quick fixes.
This current
crop of
politicians may
be long gone
before we
realize what
works, making
these efforts
all the more
laudable. But
they have
launched a
necessary first
step, which is
an active search
for policy
interventions
that can work
over the long
term.
RF
Reid Cramer
is Co-Director
of the Next
Social Contract
Initiative and
Research
Director of the
Asset Building
Program at the
New America
Foundation in
Washington, D.C.
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