To realize how crazy New York City’s pilot program for “conditional cash transfer” to the poor is, consider: with the program’s privately raised funds, the city’s “Center for Economic Opportunity” will pay $20 monthly to each adult and child who takes advantage of Medicaid—a government health-care program that’s already free. The philosophy behind the cash-transfer program, which will give families “incentives” of up to $5,000 annually for a range of desired behavior, assumes that poor New Yorkers are so unable to act in their best interest that they will not even take advantage of an existing, well-publicized government program without the promise of additional short-term cash.

Under the $53 million pilot, Opportunity NYC, thousands of families and single adults in six predominantly minority neighborhoods—Central and East Harlem in Manhattan, Brownsville and East New York in Brooklyn, and Morris Heights and East Tremont in the Bronx—will start signing up this summer to receive the cash payments (the program will enroll 5,000 families, but half of those will be part of a control group). If the pilot “succeeds” after two years, the city could do conditional cash transfers citywide, costing “hundreds of millions,” according to Linda Gibbs, deputy mayor for health and human services.

The payments are intended to encourage behavior that in many cases is only one step above anti-social. In the “family-focused” part of the program, for instance, families—likely single mothers—will reap $25 to $50 a month for making sure that each of their kids get to school 95 percent of the time (older kids will get half of the cash directly). But not sending your kids to school 95 percent of the time isn’t a reasonable standard from which to measure improvement. In fact, failing to do the basic job of sending kids to school, unless they’re sick, should be grounds for a charge of neglect. Paying people not to do something bad is simply terrible government policy. Where does it stop? Will we start paying young men between the ages of 15 and 32 not to carry illegal guns?

Opportunity NYC is not just bad policy; it’s insulting to a breathtaking degree. Through the program, the city will pay families $50 per head for obtaining library cards. This payment is an affront to the thousands of poor kids who already willingly spend their good-weather afternoons in cramped public-library branches like the one in Arverne, Queens, diligently reading books and asking for homework help when they need it, without a $50 bribe.

Other slights abound. The program will pay parents $25 just to attend conferences with their kids’ teachers—while many poor mothers already care so much about their children’s education that they enroll in lotteries to get their kids into charter schools. Such schools are so popular that the schools must turn away eager enrollees. And the program offers families with elementary- and middle-school kids up to $350 for each public-school standardized test on which kids either improve or earn a score of “proficient.” Families with older kids will get $600 a year to advance a grade, $400 to graduate, and $600 per test to pass Regents exams.

Bloomberg’s defenders might argue that such payments are necessary because, according to the Department of Education, 45 percent of black kids and 49 percent of Hispanic kids, many of them poor, don’t graduate in four years. But those numbers mean that more than half of minority students do graduate in four years (and even more in five). Even at the poorest high schools, 30 percent or so of students regularly graduate in four years. And some schools do much better. No one would say that these numbers are stellar, but they do show that completing high school, even in New York’s poorest neighborhoods, isn’t an unnatural achievement. High-school graduation is already an intensely joyful event for thousands of poor graduates and their relatives each summer, even without the city’s cash.

Besides the main family- and adult-based programs, the city plans another “incentive” program for an additional 9,000 fourth- and seventh-grade students in 20 city schools. These kids will get “small cash payments”—up to $250 per year for the younger kids, and $500 for the older ones—for perfect scores on a set of “interim assessment tests.” They’ll earn between $5 and $10 just to take the tests, and the maximum payment for a perfect score. What kind of signal is New York City sending to impressionable nine-year-olds? That wanting to learn is so abnormal and onerous that bribes are necessary?

Lest parents feel left out, the program insults them, too. It assumes, for example, that they can’t “maintain full-time employment” for six weeks at a stretch without a $150-a-month bribe. But just like the kids who graduate from high school, hundreds of thousands of adults have proven they can do just that since the end of no-strings-attached-welfare over the past decade. In fact, the Congressional Budget Office has found that over the past 14 years, the average annual income of the nation’s poorest families with children—those families in the bottom 20 percent—has risen 35 percent after inflation, more than the increase of any other income group, save for the top 20 percent. These families’ actual earnings—money from work, rather than government payments—more than doubled. This achievement was due in no small part to mothers leaving welfare and going to work, supplemented by an “earned-income tax credit,” making the federal tax structure so progressive that the income tax is actually negative for many working families.

The success of welfare reform shows that for most people, once the government removes a perverse economic incentive to stay home and collect cash, society’s normal economic incentives already work. Many such people may take advantage of the incentives the mayor’s program offers to meet some formal benchmarks if they think the reward is worth it, making the mayor’s pilot a “success.” But the initiative doesn’t do anything to address social dysfunction: the normalcy of single motherhood in the targeted neighborhoods, and the fact that kids grow up in such a difficult home environment that they have a hard time learning when they finally get to school—something paying a kid $5 to take a test can’t help.

Worst of all, the mayor’s program makes the dangerous assumption that a focus on specific behaviors can replace the traits—self-motivation, personal responsibility, and, contrary to the mayor’s cash-up-front plan, an ability to delay gratification—that are behind those behaviors. Bloomberg may instead send a message to the truly dependent among the poor that the government owes them money just to participate minimally in society.


City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).

Further Reading

Up Next