August 29, 2007
Column #1,357
A Billionaire's Answer to Poverty
by Mike McManus

"The poor you will always have with you."
Jesus (Mark 14:7)

WASHINGTON - New York Mayor Michael Bloomberg is a billionaire who cares about the poor.

At a Brookings Institute press conference this week, he asked, "Is leaving one in eight Americans in poverty really the best we can do? Are we just going to shrug our shoulders and hope that he market's invisible hand lifts them up?"

He noted that New York City had so improved its schools that math and English scores are up 20 percent and the graduation rate rose nearly one-fifth. One way to achieve those results was spending as much in poor areas per child as wealthy areas which used to get a $3,000 bonus.

"Transforming schools into centers of learning is one of the best long-term strategies to fight poverty."

A second strategy was to reduce the dependence of the poor on the government. "Welfare case loads are lower than at any time since 1964, dropping 33 percent in the past five years." Result: the unemployment rate hit an historic low of 4.9 percent. Poverty also dropped from 14.5 to 12.3 percent.

However, he has new plans to "drop poverty to historic lows."

First, he created a Center for Economic Opportunity to develop innovative strategies to reduce poverty among young adults, families with small children and the working poor. How? "By encouraging personal responsibility."

"Next month we will launch a controversial pilot program that incentivizes personal decisions - the critical decisions that are most likely to help people break the cycle of poverty. For instance, a quarter million young people between the ages of 16 and 24 live below the poverty line in New York. Often they take one wrong, short-sighted step such as dropping out of school or committing crime that leads to lifetime poverty.
"But with the right incentives, they will be better able to make the right decisions."

Based on a model developed in Mexico, Bloomberg is creating "Opportunity NYC" that will begin making cash payments from privately raised sources, to a test group of young people and adults "if they do the things that are most likely to lead them to break the cycle of poverty."

In September a high school student who passes a Regent's Exam will get a $600 check per subject.  Each year that a student accumulated 11 credits per year, he and his parents will split a $600 check up to $50 a month for maintaining a 95 percent school attendance record, and even $50 for getting a library card plus a $400 bonus for graduating.

"Adults will be able to earn up to $150 a month for working full time," said the mayor. If a worker takes a work-related course they will receive $400 to attend 100 hours of classes. Getting an annual physical earns a $200 bonus per family member and $100 for a followup visit and $100 for seeing the dentist.

"Why should we pay people for doing what they're supposed to do?" Bloomberg asked reporters at the National Press Club. "Every other anti-poverty program that's been tried has failed to get the national poverty rate below 11 percent.

"Why shouldn't we experience with a program built around the one strategy that has proven time and again to work wonders - capitalism? Employees are supposed to work hard, but the promise of a bonus usually makes people work their hardest. That's capitalism. And it shouldn't be a foreign concept to government. To encourage people to buy homes, we let people deduct the interest on their mortgages."

Opportunities NYC is targeted at a small group of 5,100 families in poor neighborhoods, half of whom will receive the benefits, while the others will not.  It is funded with $50 million of private money.  Mayor Bloomberg wrote the first check of $10 million.

Will this work? Robert George, an editorial writer for the "New York Post" applauded the mayor's initiative. But he said, those in poverty are mainly "single female-headed households." He praised the mayor for suggesting changes in federal law to "get rid of the marriage penalty," that can cost a low income cohabiting couple $5,000 if they marry.

But he added, "If they marry, give them a cash bonus. If a young girl graduates from high school without getting pregnant, give her a cash bonus."

Janice Crouse of Concerned Women for America agreed with George, adding, "We must strengthen the marriage incentives."  If she had control of the $50 million NYC budget, she would give $30 million to promote marriage.

Why not ask Presidential candidates what they would do to reduce poverty?