Groundwork is a tiny, storefront service agency that sits across the street from a hulking housing project in East New York, the Brooklyn neighborhood infamous for being one of the poorest and most dangerous in New York City. Though on the surface many blocks in East New York lack the blight of inner-city Detroit or Baltimore, the statistics here speak volumes: The infant mortality rate is double that of the city as a whole. Half of all residents rely on public assistance. Two years ago, Mayor Michael Bloomberg shut down the local public high school, which had a graduation rate of only 29 percent.
On a rainy spring morning, a string of East New Yorkers visit Groundwork's office, looking for help. A middle-aged man with a speech impediment is confused about the status of his taxes; a staff member offers to call the Internal Revenue Service for him. An elderly woman wants to arrange nurse visits for a homebound friend. A laid-off Verizon fieldworker comes in to update the staff: He has successfully applied for food stamps.
Watching the daily grind, you'd never guess that Groundwork is actually ground zero for one of the most innovative -- and controversial -- anti-poverty programs in America. This modest community-based nonprofit is one of six neighborhood partners in the experimental Opportunity NYC program, which pays poor people -- mostly single moms -- for a broad range of health, education, and work-related activities, everything from taking their kids to the dentist to getting a new job to attending parent-teacher conferences.
A project of Bloomberg's Center for Economic Opportunity, Opportunity NYC is funded entirely by private philanthropies and is modeled after Opportunidades, a successful Mexican program that also uses "conditional cash transfers" -- the social-science term for welfare payments conditioned on "good behavior." Small-scale cash-transfer programs have been tried before in North America: During the 1990s the Canadian Self-Sufficiency Project and Minnesota Family Investment Program offered cash to single parents on welfare who found full-time work. But Opportunity NYC exceeds the scope of those experiments by including rewards for education and health goals as well. Since its September 2007 launch, the New York initiative has paid $10 million to 2,400 families living at or beneath 130 percent of the poverty line -- about $22,000 for a family of three. The typical participating family earned just under $3,000 during Opportunity NYC's first year.
Bloomberg created the Center for Economic Opportunity in 2006, an effort that includes 40 different anti-poverty programs spanning 20 city agencies. The Obama administration is observing the center carefully, looking for successes that can be scaled up at the national level. But while longtime New York City anti-poverty advocates are grateful to Bloomberg for his focus on the issue, they are not all sold on his approach. Many regard Opportunity NYC in particular as the questionable pet project of their hyper-capitalist, billionaire mayor -- the richest man in New York, who is expected to spend $100 million in his quest to win a third term.
"Opportunity NYC borders on offensive -- the idea that a person can be bribed into doing better in school or being a better parent," says Mark Winston Griffith, executive director of the Drum Major Institute for Public Policy in New York City. "It sort of suggests that poverty is a lifestyle choice, that somehow if we're just given a nudge, that we can choose not to be in this condition, or choose for our children to do better in school, or choose as parents to provide better child care. It comes out of the idea that poor people are almost sort of culturally and inherently dysfunctional. Not because of structural circumstances but because of their own personal failings."
In April the city published initial results of the trial, which is the largest-ever controlled test of conditional cash transfers in the United States. There have been some notable successes: Only 43 percent of families had a bank account when they enrolled in the program; now over 90 percent of the families have accounts, a requirement for receiving the payments. And families have been very successful at earning the rewards for annual doctor's visits ($200 per family member) and good school attendance in the lower grades ($50 per child every two months).
Yet for a program modeled on the idea that intergenerational poverty is, at least in part, a "behavioral" problem that can be modified through free-market incentives, there have also been challenges -- ones that reflect advocates' concerns about the Bloomberg approach to poverty-reduction. Because of child-care problems and low skills, only about 3 percent of Opportunity NYC single moms have been able to find or maintain part-time work while taking a skills-building course, even though the city will pay them $3,000 to do so. Dovetailing with the larger Bloomberg school-reform agenda, the program emphasizes academic achievement. Yet according to the contractors who administer Opportunity NYC and are studying its results, children in the program have not done particularly well on standardized English and math tests or on the New York state Regents examinations required to earn a high school diploma -- perhaps a result of low-performing, segregated neighborhood schools or poverty-related education deficits dating back to infancy or even to a lack of prenatal care.
Unsurprisingly, some behaviors are much easier to change through cash incentives than are others -- in part because poor people don't have much control over the institutions and conditions that shape their lives. "Opportunity NYC reflects an understanding of poverty as a cultural problem," Griffith says. "The missing piece is a candid conversation about the role of wages, for instance, or affordable housing."
The idea of fighting the "culture of poverty" is nothing new. It dates back to sociological studies of the late 1950s and was popularized by Sen. Daniel Patrick Moynihan of New York, whose 1965 "Moynihan Report" focused on the so-called pathologies of the African American family, including the lack of future-oriented financial planning and a disregard for academic achievement.
There is no doubt such attitudes continue to be prevalent among poor families. Candice Perkins, a 27-year-old Groundwork staff member who helps East New Yorkers apply for their Opportunity NYC rewards, encounters them every day, especially since the recession hit. "I hear so many sad stories of parents saying, 'I have no future, I have bills to pay, I can't even think about getting a house or a car,'" Perkins says. "And their child is sitting right there. I try to step in. But hearing that promotes the kids not going to school, not going to college, being on the streets, being in gangs. What they see parents do is pretty much what they'll do with their own lives."
That's not to say families haven't changed at all thanks to the payments. Perkins works with a mother whose kids were truant before Opportunity NYC; now the mother drives them to school every day to make sure she earns the good-attendance payment. Another mom took each of her 12 kids to the dentist for $100 a pop and then enrolled herself in nursing school. "You can earn a whole salary from this program" Perkins notes. "But this is also teaching some type of self-sufficiency."
The city isn't tracking how families spend their Opportunity NYC income, but anecdotal evidence suggests no clear pattern. Most families use at least some of the money to meet basic needs, such as housing and food costs. One mom bought a freezer so she could save on groceries by buying in bulk. A number of immigrant families have taken trips to visit relatives abroad. A graduating high school senior who earned $600 for passing each of her Regents examinations bought a car to drive herself to college classes.
Of course, some families fritter the money away on video games or fancy sneakers, Perkins says. That is why conditional cash-transfer programs won't work in the United States exactly as they do in foreign countries: A subsistence farmer in Mexico or Bangladesh isn't subjected to anything like the competitive consumer culture present in American cities.
The larger question, though, is whether paying for good behavior now can combat deeply ingrained hopelessness in the long term -- even after the payments disappear, as they will when the program's three-year pilot period ends in 2010. Many poverty experts would say that a poor, single mom's negativity is perfectly rational. After all, only a handful of remarkable inner-city kids ever make it to college, graduate, and join the middle class. Without universal heath care, better schools, or affordable rent, can a $25 reward for obtaining a library card really turn around a child's future?
David Jones, president of the Community Service Society of New York, is skeptical, even though he was a member of the city task force that led to Opportunity NYC's creation. "In New York City, almost 50 percent of African American men are not currently employed. We have nearly 200,000 young people who are neither working nor in school," he says. "Those numbers can't be addressed with incremental incentive programs. Not because the ideas are bad but because the scale of the problems is huge."
Given these limitations, the Bloomberg administration is careful not to oversell Opportunity NYC. During an April visit to Washington, D.C., to promote the Center for Economic Opportunity and lobby for a similar anti-poverty push at the federal level, the mayor highlighted the city's job-placement, nutrition, and community college-prep programs -- not conditional cash transfers. Veronica White, executive director of the Center for Economic Opportunity, also emphasizes that the jury is out on Opportunity NYC. "It would be such a hugely expensive program on the federal level," she says. "It would need more research results from across the country."
That said, we'll probably be hearing a lot more about conditional cash transfers in the coming years. According to White, a number of mayors have visited New York to learn more about Opportunity NYC. In early June, the White House announced that Secretary of State Hillary Clinton will host an Organization of American States summit in New York this fall to share anti-poverty strategies across borders. Conditional cash transfers will be a special focus.
That tells anti-poverty advocates that the Obama administration is deeply influenced by Bloomberg's "experimental" approach, his strategy of letting a thousand flowers -- or research-backed programs -- bloom. And while they applaud the mayor's willingness to openly discuss poverty, they question whether "creativity" is really what's needed to solve the problem.
"Some of the ideas we're talking about are too small-bore for the third of New Yorkers who live in poverty," says Jones of the Community Service Society. "I have some concerns that there's an assumption here that the problem in dealing with chronic poverty is one of a lack of new ideas. In fact, New York, through its nonprofits and government, has been a laboratory of ideas for generations. The difficulty is bringing successful models to scale."
At a cost of $25 million annually for just 2,400 families, Opportunity NYC certainly may not be the easiest anti-poverty model to recreate at citywide levels, let alone nationally. And the Bloomberg administration has many other jobs and education programs in the works, some of them far more promising in terms of bang for the buck. But despite its shortcomings, Opportunity NYC continues to be the calling card for the Bloomberg anti-poverty agenda, leaving less sexy issues, like the need for more public housing, by the wayside.
"Mayor Bloomberg has most definitely made an attempt to be a champion of what he regards as progressive ideas," says the Drum Major Institute's Griffith. "I applaud him for it, and I think he deserves some recognition and support. But a lot of his programs are sort of isolated and concentrated interventions that don't change the structure and system that poor people live in."