We Need Incentives to Avoid Poverty?

There's a well-written and researched, but odd article by Jonathan Keg on page one of today's Wall Street Journal. I'm really not quite sure what to make of it. It discusses a small scale effort in Chicago to give incetives to low-income families to change the behviors that lead to poverty.

For the past year, residents in a low-income neighborhood here have been earning rewards for paying their rent, getting their children to school every day and seeking work...

The "Pathways to Rewards" program, run by a nonprofit organization called Project Match, has awarded about $19,000 in prizes to about 130 people since its inception a year and a half ago. It is one of several small, locally based programs around the country attempting to use incentives to motivate the poor to improve their lives...

Participants meet with counselors to establish goals. Some goals are modest: keeping a clean house (10 points), paying rent on time (5), or decorating a home for the holidays (5). Others are more ambitious, such as finding a job (10), getting a promotion (15), or receiving a high-school-equivalency certificate (50). Children earn 5 points for improving school attendance or grades, signing up for library cards or participating in extracurricular activities.

The program recognizes that behviors need to change in order for these people to escape poverty. It seems to take the place of a missing cultural education connecting effort to success.

Then comes the real head-scratcher.

Rich Sciortino, president of Brinshore Development, the private company developing much of the new housing in the community, says he's encouraged by early results of the experiment. But he, too, says the program needs to include middle-class families. "I hope it's priming the pump for something that serves the larger community and integrates people," he says.

Huh? The middle class people are almost certainly already doing all of these things. They don't need incentives to do the things they already know are required for success. How many of you need a program to give you bonus points for keeping your job or making sure your kids go to school?

I can't quite figure out what this article is telling us about the situation in these neighborhoods. The first thing that strikes me is that the program is like one you would give your child, associating allowance with work so that they grow to link work with pay. It's as if this lesson was never taught at all. A key quote from the article is this:

Ms. Herr, 63, taught fourth grade at a school in Chicago's Cabrini-Green housing project before starting Project Match, a welfare-to-work program, in 1985. Her office was in a broom closet and she drove welfare recipients around town for job interviews. Soon she says she realized that finding jobs was relatively easy, but getting people to keep them was difficult. "That was the 'a-ha!' " she says.

She decided to add incentives for people to get jobs, hang on to jobs or reduce the amount of time they spent between jobs. She says she demanded high levels of accountability and wanted social workers to step in quickly when problems arose.

The program got results, and the concept of tracking workers to promote job retention and advancement caught on with government agencies and other nonprofit groups.

It's absolutely marvellous that she's doing this and I'll look into doing a World of Good post about her, but it's a curious thing, this need to help people keep going to work.

There's much more to the article. I highly recommend you read the whole thing.

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