APRIL 27, 2011 6:52PM

Here’s an idea: let’s treat poor people like oil companies

Rate: 5 Flag

America loves its oil companies. We don’t have a lot of choice in the matter; there are over 200 million American drivers and about five oil companies. Which explains why they made $77 billion in profits last year.

They have a good business plan. They spend an average of $29 to produce a barrel of oil that they turn around and sell for $100.

If that wasn’t enough (apparently it wasn’t), they also receive massive tax subsidies from our federal government / the taxpayer. President Obama and a number of Congressmen and women would like to cut $40 billion in oil subsidies over the next five years, but something tells me that’s a long shot. (We cut less than that from the 2011 budget, and that was “historic.”)

Here’s a question, though, while we’re contemplating our protection of big oil: why not treat people living in poverty the same way?

I know impoverished Americans aren’t oil companies. They don’t overcharge for gasoline or pollute our air, and they didn’t spill 200 million gallons of crude oil into the Gulf of Mexico, impacting over 320 miles of Louisiana shoreline and killing 11 workers.

They’re kinda boring, to be honest.

But let’s say we loved them the same way. Can just giving them money – in the billions – actually solve anything?

In 2007, New York City’s Center for Economic Opportunity launched Opportunity NYC – a privately funded and experimental cash transfer program to help families emerge from poverty.

The idea is simple: give poor people money.

Crazy, right? What are they going to do with that?

I’ll explain. Opportunity NYC gave cash “rewards” to 2,400 low-income families – so about 5,500 children – that lived at or below 130% of the poverty line. Money was provided as rewards if the families met certain conditions – such as school attendance and achievement, maintaining health insurance and visiting doctors for preventative care, and working full-time and completing job training activities.

On average, families received $6,000 over two years. It’s not $70 billion, but you have to start somewhere.

The research organization MRDC analyzed the program and found a lot of areas of success (and some room for improvement). The money worked in three ways: first as an income supplement (which immediately reduced economic hardships for the families), second as an enabling resource (the accumulation of money made it possible to promote their children’s education, obtain preventative healthcare, and find better jobs), and third as an inducement (families wanted to meet the conditions to get the rewards).

So did it help?

Compared to the control group, the number of families in the program whose household incomes were below 50% of the federal poverty level dropped by over 44%. There was a 41% rise in families that had bank accounts. And 38% fewer families used a hospital emergency room for routine health care.

It worked.

Not everything panned out, of course – for instance, the school outcomes for elementary and middle school students didn’t really improve, though school attendance and standardized test results among high school students did improve. Educational results are hard to quantify over such a short period, but further research will elucidate what changes need to be made to fix that portion of the venture.

And the whole thing cost only $14 million for a two-year program.

Now this program served about 5,500 children, and there are 14 million children living in the U.S. below the poverty line. If we did the math (and it’s never this simple, but what the hell) we’d see that an expanded version of the exact same program (before we fixed it to make it leaner and more effective) would ring us about $35 billion and change.

Less than we’re currently throwing at oil companies from the taxpayer trough. We’d have enough left over to cover a fourth of BP’s liability in the Deepwater Horizon spill.

Of course pulling some 14 million kids and their families out of poverty means that more people will be contributing to the economy, buying cars, and then buying gasoline and making the oil companies even more profits. So we’re still showing them our love in the end. But what else would it change? $35 billion is a lot, after all.

We know that more of them will have insurance and fewer will use hospitals for routine health care. How many uninsured people show up at the hospital, anyway?

According to the Department of Health and Human Services, about one in five emergency room visits are by the uninsured. And it added up to about $116 billion in health care costs in 2008. Which was then covered by tax dollars, struggling charities, and higher insurance premium costs for you and me.

That might cover the program. And all we’re doing is telling people that if they want the money, they have to go to work, go to school, and go to the doctor.

As for the oil companies, we might consider telling them to go to hell.

Your tags:

TIP:

Enter the amount, and click "Tip" to submit!
Recipient's email address:
Personal message (optional):

Your email address:

Comments

Type your comment below:
That sounds like a fascinating program. Why don't they institute it in Los Angeles, too??
Dude do you have a real job?