Nearly 23 percent of Americans who call a major American city home today live in poverty. And the rate is growing: from 2000 – 2013, the poverty rate in the 20 largest cities in America grew by nearly 36 percent, to this new “normal of 23 percent.” Nationally, the number of Americans living in poverty grew more modestly: from 11.3 percent in 2000 to 14.8 percent in 2014.
However, there’s one city that has defied this trend and saw a declining rate in the number of its residents living in poverty: New York City. According to a recent article in the “Washington Monthly”, “New York City’s poverty rate has defied national trends by declining. While New York once suffered one of the highest poverty rates among the country’s largest cities, today it boasts one of the lowest, with a smaller share in poverty than in Los Angeles, Chicago, Phoenix and Houston, among others.”
How did this happen? Former Mayor Michael Bloomberg declared not just a “war on poverty” but a “data-driven” war on poverty. These innovative programs were a by-product of Bloomberg’s support of the innovative welfare reform legislation that was passed by then-Speaker of the House Newt Gingrich and signed into law by President Bill Clinton. A key requirement of that historic welfare reform legislation was a work-focused welfare policy. Yet the NYC mayor saw failing results of nearly every welfare program that the federal government put into place. Bloomberg said, “Every other antipoverty program that has been tried has failed to get the national poverty rate below 11 percent. So what are your options? Do nothing or dress up the same old failed ideas? We have other options, but only if we are not afraid of thinking outside the box, even if that means breaking old taboos.”
In 2006, Bloomberg launched an experiment to eradicate poverty in NYC. The citywide initiative was based out of a new department appropriately called the Center for Economic Opportunity (CEO) and, over time, would roll out 30 new initiatives – some successful, some not so much. Experimental programs were encouraged but each one need to have an evaluation strategy so that even the most controversial idea was eligible to be tried. Successful programs that achieved results were allowed to continue; those unable to demonstrate even modest success were quickly discontinued.
Thousands of government officials have, over the past 40 years, continued to wage a war on poverty with very limited results. Bloomberg showed in these innovative experiments, that poverty can be dramatically lowered but it takes innovation and experimentation – something that most government agencies are unable to do. Some of the CEO experiments were very controversial: “Family Rewards, a program that provided cash payments to the poor if they took such positive actions as sending children to school. Other efforts – such as program called ‘Paycheck Plus’ – was aimed at tackling a growing conundrum: falling work rates for low-skilled men.”
A major part of CEO’s mission was to record their results and to share them with other cities willing to do what it takes to help Americans escape poverty. Rather than forcing small business owners to comply with a crushing list of local government mandates, New York City officials were serious about eradicating poverty. Our local officials in Minneapolis and St Paul appear to be more interested in fighting a war with our small business owners and job creators.