Do Cash Payments For Accomplishments Really Help Reduce Poverty?

In 2011, Memphis, Tennessee launched an initiative called Family Rewards.  The $11.5 million initiative was meant to mirror a similar program in New York City that offers cash incentives to teens who maintain regular attendance in school, earn good grades, and attend doctor and dentist visits.  Parents are also given rewards for completed their GED and keeping a job.  The goal of the initiative is to give families an incentive to improve their health and accomplish things that will help them pull themselves out of poverty.

Families who participated in the initiative were pre-selected based on their receipt of public assistance and/or food stamps and having a child enrolled in high school. A total of 613 families with 850 ninth and tenth grade students were selected.

Memphis Mayor A.C. Wharton stated at a news conference during the initiative’s launch that, “Too many Memphians see no path forward and now way up and out of crippling, multi-generational poverty.  The ripple effect on crime, education and housing values are evident everywhere.”  The program will allow families to receive an average of $2,000 to $3,000 in rewards over the course of three years.

Similar programs have been implemented in over 20 countries across the globe, and the incentives are known internationally as “conditional cash transfers.”  The goal of many of the programs is to increase self-sufficiency, create healthy habits, build human capital and promote savings.  The programs are different from most poverty reduction programs that focus on social services because they encourage participation rather than allowing reliance on a hand out.

In December 2012, journalist Stacey Tisdale traveled to Memphis to cover the progress of the Family Rewards Program in an edition of PBS’s “Your Money and Your Life.”  Tisdale is an award winning journalist and author who is considered a financial expert and has reported on business and financial issues for more than 15 years.

In the episode, Tisdale interviews Memphis Mayor A.C. Wharton and New York Deputy Mayor Linda Gibbs.  Watch the video to learn about the how the program has unfolded and the impact it is having on partcipants.



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