Bridging the Opportunity Divide

Participants Claim This Program Boosts Them out of Poverty. Should Other Cities Implement It?

October 9, 2015
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Participants Claim This Program Boosts Them out of Poverty. Should Other Cities Implement It?
Family Appreciation Day celebrates successful members of the Family Rewards program in Memphis. Courtesy Children's Aid Society
The divisive concept has found success helping the poor in Memphis.

LaKesha Griffin wanted to get as far from Memphis as she could. A self-described “hardheaded” teen, she ignored her mother’s pestering about college and found a job post-high school as a flight attendant for United Airlines. But in 2001, United Flight 175 brought down the South Tower of the World Trade Center and United Flight 93 crashed in a Pennsylvania field. The airline industry took a massive hit, and despite six years of seniority, Griffin was one of 20,000 people laid off from United. Unemployed, she returned home to Tennessee.

“It was an awful thing,” is how Griffin describes her experience of looking for work for three or four years. “I needed to start all over. It’s not like you walk into McDonalds and make $20 an hour.” She obtained a practical nursing certificate in 2002, but still struggled to find work. When the country fell into recession after the subprime mortgage crisis, Griffin realized she needed a college degree. But as she neared the 72-month lifetime limit on drawing welfare benefits, she realized that she was in a bind: without a full-time job, she couldn’t support herself and her teenage daughter; with full-time employment, she wouldn’t have time to focus on her schooling. That’s when, seemingly by chance, a savior called her on the phone.

Five years later, Griffin has a daughter in college (who’s preparing to attend law school) and a master’s degree of her own. She’s been employed consistently since May 2012, most recently as a social worker for the Mississippi Department of Family and Children’s Services. How did a family that subsided on food stamps become so successful in such a short period?

LaKesha Griffin received her Master’s Degree from the University of Tennessee at Knoxville in May of 2014.Courtesy of LaKesha Griffin

Family Rewards is a bold attempt to break the intergenerational cycle of poverty, but it’s rooted in a simple premise: pay parents small amounts of money so they don’t have to scramble to make ends meet, but make those funds conditional on bettering the next generation’s chances of escaping poverty. (In other words, pay a hungry person to teach their kids to fish.) Known as a conditional cash transfer, the three-year program (which concluded in 2014) recruited 1,200 families relying on public assistance in the Bronx and Memphis. Many were led by single mothers, and all included at least one child of high school age. Family Rewards offered eight incentives, ranging from $40 to $500, for these families to improve their employment, education and health. A full study is forthcoming next year, but early data that the program’s organizers shared with NationSwell reveals that this new model could redefine our country’s welfare system.

In Memphis, out of the 613 families enrolled, 99 percent earned at least one of the eight rewards, according to data provided to NationSwell by the Children’s Aid Society, which is the lead agency operating Family Rewards. Nine out of every 10 families improved their health by getting an annual physical ($100 per family member) or dental care twice yearly (another $100 per visit). Ninety-six percent of the 1,097 Memphis high school students who participated received at least one cash reward for having a 95 percent attendance rate ($40 a month), taking the SAT or ACT exam (a one-time $50), getting higher grades ($30 per A, $20 per B and $10 per C) and passing their final exams ($200 each for up to seven tests). The most difficult category, by far, was entering the workforce: only half — 53 percent — earned a reward for sustaining full-time employment ($150 a month) or earning a GED certificate (a lump sum of $400).

To some, these achievements might seem laughably easy, but try passing the GED when your car won’t run, public transit is delayed and you need to get from Memphis to a test prep class across the state line. Add to that scenario the stress of doing it while also worrying about making it back in time to go to work. A monthly $150 reward goes far, especially for a family earning $17,000. But it requires an immeasurable amount of grit and determination to earn.

Family Rewards paid Griffin and her daughter to get better grades in school, go to the doctor’s office and boost working hours — all cash deposited directly to her bank account. “I get excited every time I tell people my story because of where I came from, from having no job to starting over, building myself from the ground up. I don’t think I ever have to worry again,” Griffin gushed as she ran out of the library, where she was studying, to speak to NationSwell by phone. “I don’t know how [Family Rewards] ever got my name, but it was the best thing that ever could have happened to me at that time in my life.”

LaKesha Griffin and her daughter, who graduated high school earlier this year.Courtesy of LaKesha Griffin

Critics of the program say that its effectiveness at changing behaviors may be overstated. But anecdotally, participants say they aren’t working for the rewards; it’s the rewards that help them work. Echoing Griffin’s story, one participant tells Politico, “Motivate me? I was already motivated,” says Sheena Lyons, a school cafeteria worker. “I did most of this stuff anyway. My problem is money, not work. I always work.”

Tonya Melton, director of education and employment for youth empowerment programs at Children’s Aid Society, recalled another case of a family struggling with homelessness. Case workers could barely keep track of them as they moved from couches and floors to shelters to apartments. But once the family fully participated in the rewards program, the high schooler earned $530 one year and started community college this fall.

“With welfare, food stamps, [Temporary Assistance for Needy Families], I think there’s constant exploration of the question, ‘How can we maximize the use of funds to motivate people to move out of poverty?’” Melton says. “Does that create long-term change?”

In Memphis, Jessica Taylor participates in Family Appreciation Day, along with program advisors Darrel Davis and Coasy Hale.Courtesy Children's Aid Society

In its current form, the American social safety net is an all-or-nothing system. Unemployment insurance only covers someone until they’re back to work, even if it’s a dead-end, minimum-wage job; there’s little public aid for someone, like Griffin, who wants to rise to middle-class status but needs a second chance at schooling to attain it. The amount of aid ranges from state to state, from a high of $49,175 for a Hawaiian family participating in more than 90 federal anti-poverty programs to a low of $16,984 for the same family in Mississippi, according to a 2013 report by the Cato Institute, a libertarian think tank. A family like Griffin’s in Tennessee is eligible for $17,413 in benefits — about $8.37 an hour if you divide the total over 260 work days, which is higher than the $7.25 minimum wage in the Volunteer State. (Tennessee’s legislature has not adopted a minimum wage, so the federal rate applies.)

Why, some ask, would a person get a job when traditional welfare programs offer significant cash benefits? Republican presidential candidate Dr. Ben Carson, on The View last year, said, ”You rob someone of their incentive to go out there and improve themselves.” Contrast that with a small group on the left, like the Food Research & Action Center, who claim our system doesn’t provide enough financial assistance to propel a family out of poverty.

Katrel Jones was a participant in the Family Rewards program in Memphis.Courtesy Children's Aid Society

Across the globe, however, conditional cash transfers are becoming the preferred social safety net. After witnessing the inefficiency of distributing staples like milk and tortillas, Mexico rolled out the world’s first conditional cash transfer program in 1997, offering steady payments to roughly 6 million households on the condition that families meet certain requirements, like keeping their children in school and visiting health clinics for regular checkups. Our southern neighbor’s model has since been replicated in 52 countries, including Colombia, Brazil and the Philippines.

Tying progressives’ concern for the poor with conservatives’ emphasis on rejoining the workforce, the model interested Michael Bloomberg, then-mayor of New York City. His thinking: that conditional cash transfers weren’t so different from the Earned Income Tax Credit for working families, and that $40 in the bank each month might prove a more tangible incentive than a distant $1,250 credit next April. Bloomberg decided to test the idea, and in 2007, the Big Apple launched three demonstration projects in six hard-hit neighborhoods.

“The worst thing that can happen is it won’t work and we’ll have to try something else,” Bloomberg reportedly told advisors, wagering millions of dollars from his own foundation and soliciting private funding from big-name groups like the Rockefeller Foundation, insurance giant AIG, Robin Hood Foundation, George Soros’s Open Society Institute and more to back $40 million in potential conditional cash transfers.

In Memphis, community members helped by the Family Rewards program enjoy Family Appreciation Day.Courtesy of Children's Aid Society

The initial program distributed only $20.6 million to families. While it achieved had modest gains, particularly in healthcare, opponents said they didn’t justify the cost. “A welfare mother in Central Harlem is not poor for the same reasons that a subsistence corn farmer in Mexico is poor,” Heather MacDonald, a fellow at the conservative Manhattan Institute for Policy Research wrote in a scathing takedown, entitled “Bribery Strikes Out.”

Family Rewards, the most comprehensive of the three pilots, was picked for a second iteration in 2011, in which Griffin was a participant. To focus on achievable results, the number of rewards was pared down from 22. Funded by a Social Innovation Fund grant, the program underwent a rigorous, three-year randomized control trial  in which half of the participants received no aid. In Memphis, those receiving rewards had their incomes boosted by $5,442, on average.

Griffin says she’s “furious” the project ended so abruptly last year. She still refers people she meets to Family Rewards, telling them to call any of the caseworkers because she’s sure they would offer some help, like they did when she was at her “breaking point.” While the program may not be a cure-all for poverty’s grip on American cities, it’s a start, especially for motivated mothers like Griffin. “I’m gonna make it. I could make my rent up. I could pay my tuition,” Griffin thought with relief, when she signed up. “I’m going to be okay.”

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