NYC Bureaucrats Administer Citizen Wealth Setback

health600New Orleans New York City announced that it was ending its experimental program called Opportunity NYC Family Rewards that had offered cash incentives for achieving modified behavior from poor families. From the article it seems that the failure of the City of New York to modify its behavior was the real story here, rather than the impact on the citizen wealth of the poor families. Mayor Bloomberg seems to have concluded that he failed to find a “silver bullet” or “simple solution,” but maybe he’s not looking at the real story here at all.

In a $40 million dollar program over three years designed to give parents cash money for little things like going to the dentist ($100) and big things like holding down a full-time job ($1800 per year!) and passing the high school competency test ($600!), somehow the people in charge managed to spent more than $10 million on operating costs including their salaries and almost $10 million on research and evaluation, and only managed to get $14 million of the $40 million out to poor families. The “opportunity” seems mainly to have been for the full employment program for the project bureaucrats and researchers and not for poor families at all!

They claimed that 2400 families participated in the program. On the back-of-the-envelope math on $40 million expenditure that would have averaged about $16,667 per family over the period. But in reality barely one-third of the dollars went to the families with an average of $5833 per family. NYC reported that those who “participated earned, on average, more than $6000 a year in the first two years” according to the article in the New York Times, but who knows how the math worked there?

And, typically, besides spending more to figure out how to give it away and to research who got it than they were giving, the City also confessed that the program was way too complicated. According to Linda L. Gibbs, the deputy mayor for health and human services, “Big lesson for the future? Got make it a lot more simple.” No, duh! She said, “many families had been perplexed by the guidelines that were laid out for them.”

It is not hard to understand from the expenditures and from Ms. Gibbs’ comments what really went on here to subvert a good program and a great idea. At the base clearly the program was premised on a lack of trust for the poor. Once again a citizen wealth program was subverted ideologically because it was assumed the poor would scam and that the big problem would not be modifying behavior but protecting against scams.

This could have and should have worked. The results in Brazil on these Lula-led programs have been outstanding and almost revolutionary!

It could have worked in New York City as well if the bureaucrats had been willing to keep in simple and give more money to the poor and keep less for themselves and their political need to research and study every dollar they gave away.

More money really does reduce poverty. Let’s embrace that ideology rather than any other, and next time, make this work!

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