Paying the Poor to Behave


By Tracie McMillan • March 30, 2007

Yesterday, New York City’s Mayor Mike Bloomberg unveiled specifics on the newest piece of his groundbreaking antipoverty initiative: Paying the poor for behaving well. From a press conference in hardscrabble Brownsville, Brooklyn, Bloomberg and Deputy Mayor Linda Gibbs explained that, come September, the city will be paying poor families for keeping doctor’s appointments and making sure their kids go to school. Funded with private foundation grants, these “conditional cash transfers” will, among other things, pay $25 for attending elementary school here, $300 for a good test score there; if a family collects every reward, they stand to net $5,000.

While everyone agrees that something needs to be done about poverty–one in four New Yorkers falls below federal poverty guidelines–the pay-for-good-behavior plan has gotten tongues wagging over how best to deal with the problem. Conservatives don’t want to pay poor people to do the sorts of things everyone else has to do for free; the word bribery comes to mind. Liberal backers see it as a way to help low-wage workers avoid losing income for doing things like going to the doctor when they’re sick. Whatever the motivation, it’s hard to miss the fact that distributing cash rewards by closely tracking the minutiae of daily life creates, well, a wee bit of a nanny state.

“Republican-driven nanny state” might sound like a contradiction in terms, but it’s actually par for the course in post-welfare America; the conditional cash transfers announced by Bloomberg are just the latest example.

Here’s why: Welfare reform initially ignored the fact that people could work and be poor in America. While that’s not news to anyone who’s done a stint in the service industry, post-welfare America has–rightfully–reacted with great concern that this is the case. So, how do you make it so that people who work aren’t poor?

Traditionally, the answer was to give them money. That could be through a cash grant, now politically dead, or family-supporting wages (not dead, but at best nascent). Even the looming hike to the minimum wage, to $7.15 an hour, isn’t particularly encouraging, since it takes roughly between $13 and $30 an hour to support a single mother with two kids, depending on where you live in the country.

Today, politicians have to grapple with the fact that our poor are at the bottom of the economic ladder largely because they don’t have enough money, not because–as was previously thought–they don’t work. Because there’s no political will to simply give the poor more, politicos are forced to figure out ways to, essentially, teach the poor how to get more money. In addition to the cash transfers, this approach includes programs that use caseworkers to troubleshoot the poor out of poverty, like New York City’s fraught WeCare program. In essence, government creates all kinds of helping hands, ranging from cash for acing tests; social workers helping you stay on track with a medical plan; or helping noncustodial dads keep up on child support.

Are these approaches good or bad? WeCare hasn’t gotten stellar reviews on the ground, and the dads program has been tried before with little success. As for cash transfers, as much as I wince at the paternalistic idea of that we can solve poverty by submitting poor families to close government oversight of their daily lives, the bigger question ends up being far more practical: Does it work? And only time will tell that.

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