Next mayor can use existing means to help reduce poverty

FARAH JIMENEZ, FOR THE INQUIRER, Sunday, March 1, 2015

In 1964, President Lyndon B. Johnson threw down the gauntlet.

This thing called poverty, he said. We can eradicate it. Follow me into battle as I declare war on it.

We did. And, according to 70 percent of respondents from a 2014 survey conducted by the left-leaning Center for American Progress, it was a war effort that made little or no difference. Worse, for 23 percent of those surveyed, the campaign made matters worse.

Ouch.

Considering that we spent 50 years and $22 trillion on this war, maybe they are right. To paraphrase President Ronald Reagan: We declared war on poverty, and could it be that poverty won?

Mayors across the country are saying no. Or, at least, not yet.

Long regarded as a third rail in politics, poverty alleviation is fast becoming a call to action for urban mayors. Standing on the front lines of this new battle are cities like Savannah, Ga.; Cleveland; and, yes, Philadelphia. More on this later.

But for the next mayor, who is certain to have an already burgeoning policy agenda, what’s the argument for adding poverty alleviation? Putting aside liberal populist ideals of income equality and bleeding hearts, reducing rates of poverty just makes good economic sense.

It is not easy to calculate the aggregate value of shifting large numbers of tax consumers into the category of taxpayers. There is too much variability in human behavior. But common sense tells us this is good – for individuals, for their families, and for the city.

And recent evidence from Philadelphia helps prove the point. From 2011 to 2013, the city’s once-startling 28 percent poverty rate dropped to 26 percent. Though we still have too many people – 396,000 – living at the margins, a two percentage-point drop in just two years is cause for celebration.

So let’s honor, um, let’s honor -. Who is owed our gratitude for this good news?

We don’t know. And that’s a problem.

So why don’t we know?

Because until the January 2013 launch of the mayor’s Office of Community Empowerment and Opportunity, we never thought to ask the question. Seems like a big oversight, right? Yes, but it is important to understand that poverty work grew out of a charity model. The formula for which is: Identify the need. Meet the need. Success. Hunger finds a free meal and the need is met. Success. A low-income homeowner with a leaky roof receives a free home-repair service. Need is met. Success.

For an annual price tag of $700 million, Philadelphians may be interested to know how many people were served, but they may prefer to understand their return on investment. Philadelphia’s Office of Community Empowerment and Opportunity joins programs like Step Up Savannah, the Council for Economic Opportunities in Greater Cleveland, and Vibrant Canada in augmenting the role of research and evaluations in the city’s poverty work.

In the past, a city agency, such as the Office of Community Empowerment and Opportunity, might have taken credit for the two percentage-point drop. But that didn’t happen. Applaud the news? Yes, the agency did that. But without a clear understanding of the causal factors that led to it, there is no way of knowing whether collective efforts drove down the number of Philadelphians living in poverty or whether it was just dumb luck.

As far as I can tell, it’s impossible to duplicate dumb luck, but good program design and strong performance management can be replicated and organized to take more points off Philadelphia’s poverty rate.

The next mayor should take a close look at the Office of Community Empowerment and Opportunity and its Shared Prosperity Plan. There’s a lot to like about this initiative. Foremost, its introduction of research, metrics, and evaluations to a citywide and collaborative approach to poverty alleviation.

Be generous in the application of these tools to inform policy decisions. It might help avoid the trap of feel-good remedies that wind up leaving a lasting bellyache. Exhibit A: The recent move to increase the city’s minimum wage to $12 an hour.

On the basis of the “how could you not?” approach to poverty program design, it seems counterintuitive that anyone who cares about vulnerable populations might argue against raising the floor for hourly wages. It feels like the right thing to do.

But after 20 years working in the sector, I can tell you many things in poverty work are counterintuitive. Only research and modeling free from a results bias can help us understand whether that which feels good will really be good.

Yes, some low-income wage earners will benefit from a pretax increase of $80 to $160 a week. But some will lose. As city contractors, including many mission-based nonprofits, line up to request waivers from the $12-an-hour rate, how many people might lose their jobs or have reduced hours to make up for the budget deficits the increased labor costs will cause?

With an increase in weekly wages, how many people will be pushed off the welfare-benefits cliff – finding themselves unable to work because they no longer qualify for the means-tested programs that made it possible for them to work in the first place?

With the minimum-wage hike, how many kids will go without summer jobs unless the jobs are subsidized? And how many jobs can the city afford to subsidize now that the rate is going from $10.10 an hour to $12?

To the next mayor, I say: Listen to your heart and engage your head in the battle against poverty. It is a worthy fight. And with quality research and an eye toward a return on investment, we may finally gain some ground on that war on poverty.

 

For the full article, click here: Next mayor can use existing means to help reduce poverty

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