With homicide rates and gun violence on the rise, some cities are trying controversial programs in an attempt to address the root causes of crime. This spring, Washington, D.C. voted to approve a program that would provide stipends to at-risk people to help ensure that they don’t commit violent crimes. Critics characterize the program as rewarding criminals for refraining from doing what they shouldn’t be doing in the first place. They say the program is antithetical to our values as a country of laws and lawbreakers should be penalized when they do commit crimes, not rewarded when they don’t. But these programs are actually much more involved than a simple payment to stay on the straight and narrow.

Blessed Are The Peacemakers 

The D.C. program that was approved this spring, which will likely never come to pass because it won’t be funded, is based on a similar program in Richmond, California. The program would have cost $4.9 million over four years, $460,000 of which would have been in stipend payments. The entire program was taxpayer funded, unlike in Richmond where the stipends were funded by private foundations. In the video below, advocates for the proposal in D.C. give a brief explanation of how they would characterize the program.

Proponents argue that it isn’t a welfare program or a bribe. Rather it is a way to reward people who are at-risk to continue criminal activity (particularly violent criminal activity) for choosing to engage in socially positive activities instead. For example, one woman in the video gets a stipend for pursuing training for a design career. That activity might not be available to her without the stipend and by opening her up to that opportunity the stipend helps ensure her success. That, in turn, makes the community safer.

It’s unclear how much the program in Richmond, called the Operation Peacemaker Fellowship, is actually responsible for the city’s decrease in crime. But there has been a sharp reduction in violent crime since its implementation and officials note that four out of five participants in the program are no longer engaged in gun crimes. The Richmond program is more involved than merely identifying people who are likely to commit a crime and giving them an economic incentive not to. It involves continuing mentorship and requires that fellows meet goals they have set for themselves as a pre-condition for receiving the stipend. One could characterize these as payments for getting a GED or some other accomplishment as easily as they are labeled payments to not commit crimes.

This video by PBS, which is long but worth viewing to understand the program, goes into detail about what exactly Richmond did and how the stipends actually work.

As the video explains, the stipends are for a limited 9-month period, paid once a month, and are directly tied to the accomplishment of certain goals in that person’s “life plan.” While the program requires participants to stay away from gun violence, payments are conditional on a range of factors beyond simply avoiding crime. The introduction of positive activities and new positive behaviors is required.

Arguments Against

Financial incentives can be powerful tools for changing habits. The trick to using a financial incentive is to make sure that you are incentivizing what you want, and not something that could be counterproductive. For example, perversely incentivizing the breeding of rats (there’s more on that in an earlier post). With this program, there are two potentially negative incentives that we might worry about.

The first one is a classic perverse incentive when offering aid to people in particularly bad circumstances. We do not want such a program to encourage people to commit crimes, or a series of crimes, in order to be eligible to participate. If the amount of money being offered is high enough previously law-abiding citizens (or at least citizens who weren’t committing gun violence) might decide to become eligible for the program.

This fear is probably farfetched. To be eligible for the program you need to be a likely offender, so either someone likely to commit a crime or be the victim of one. Often that means having a criminal record or living in an area where there is heavy violence, or both. The highest potential payment is $9,000, which requires 6 months in the program before you’re eligible and then the payments are broken up over nine months. So assuming you get the full $9,000, it would take you 15 months and a lot of work to earn it. There are easier ways to earn money.

The second argument against the program is that by providing a financial incentive we are diminishing the “intrinsic motivation” of the fellows in the program to not commit crime. Instead of wanting to not break the law for its own sake, the motivation is now financial, which will stop when the payments stop.

This argument is a misunderstanding of how the program actually works. If the program were actually just a check made out to the would-be criminal in exchange for showing they hadn’t committed a crime, then yes, the payments would be the primary motivation and when they stopped so would the motivation. But that isn’t how the program is designed to work. The program is designed to make payments for new starting new behaviors, not for stopping old behaviors. For example, a goal in someone’s life plan might be getting a GED. That month’s payment would be made only if the GED was acquired. Not engaging in gun violence keeps you in the program but that isn’t enough to get the stipend. If that happens in the last month of your eligibility, you aren’t going to give back the GED or undo some other milestone. It is already accomplished.

Similarly, the new behaviors that are being incentivized are also behaviors that, in and of themselves, make someone less likely to commit crimes. Take the GED example once again. Increased education will lead to increased earning potential over the long term, and therefore, is likely to reduce crime. So even when stipend payments stop, the effects of achieving the required goals are ongoing.

A third argument against this program is that it is contrary to our values to reward people for not committing crimes. Again this is based on a mischaracterization of what the financial rewards are actually for. The stipend is not necessarily paid to everyone in the program who is nonviolent. Rather that is the baseline requirement for entry into the program. The financial rewards come when milestones are met or goals reached, which is a concept that is consistent with our value of rewarding hard work. It’s much more like giving an allowance to your child for cleaning their room than it is a bribe for not throwing a tantrum.

The main distinction between the D.C. program, which will probably never be implemented, and the Richmond program is that the administrative costs were taxpayer-funded in Richmond, but not the stipends. The D.C. program planned to use taxpayer money for both. Obviously, it is very easy to support a program that gives away other people’s money, but when that money is coming from your taxes, support might be more grudging. I’ve never committed any crimes and no one is, as far as I know, offering me a stipend for that behavior.

But I’m not at-risk either. Offering me a stipend would not be a good investment because I am unlikely to commit a crime in the first place. However for individuals who are likely to cause harm to society (which we can more-or-less measure in economic terms) and cost taxpayers to then incarcerate, a program like this might well be cheaper. And that isn’t even factoring in the human value of reducing death and imprisonment while increasing opportunities.

Conclusion

The headline “Paying Criminals to Not Commit Crimes” is fairly catchy but it is not an accurate description of the program proposed in D.C. or the original program in Richmond. When you introduce a financial incentive to a problem you always run the risk that you’ll encourage something you did not intend to. But just because the incentive is financial does not automatically make it bad. Greed can, in fact, be good.

Resources

Brookings Institute: Should We Pay People Not to Commit Crimes? 

Law Street Media: Perverse Incentives: Are Needle Exchanges Good Policy

Washington Post: Paying Criminals To Stay Out of Trouble: D.C. Could Be The Next City to Try Experiment

NBC Washington: Crime Still Won’t Pay As D.C. Crime Stipend Falls Dead

Time.com: Should Cities Pay Criminals To Not Commit Crimes? 

NPR: To Reduce Gun Violence, Potential Offenders Offered Support and Cash

NYTimes: D.C. Crime Bill Would Pay People To Avoid Committing Crimes

Associated Press: DC Bill Would Pay People Stipends Not To Commit Crime

Mary Kate Leahy

Mary Kate Leahy (@marykate_leahy) has a J.D. from William and Mary and a Bachelor’s in Political Science from Manhattanville College. She is also a proud graduate of Woodlands Academy of the Sacred Heart. She enjoys spending her time with her kuvasz, Finn, and tackling a never-ending list of projects. Contact Mary Kate at staff@LawStreetMedia.com

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If there’s one thing most Americans can agree on it’s that our education system is in dismal shape. A big chunk of that comes from the fact that our public schools have not, in some places, been able to provide students who come from low-income families with the resources that they so desperately need to be successful. One proposed way to fix this for at least some students is to institute a system of school vouchers. The idea of such programs has been heavily debated and discussed for decades. Read on to learn about school voucher programs and both sides of the debate.

What are school vouchers?

Vouchers parents to send their children schools outside of those assigned to them by location. These schools are often described as more innovative charter schools than are found in the traditional public system or private schools. Use of school vouchers varies throughout the United States, with some programs run at the state level, and others at the city level. Some notable long-lasting programs include those launched in Milwaukee in 1990, and Cleveland in 1995.

What is the argument in favor of school vouchers?

Providing families with more choices about how to raise their children is a staple of the American way and the voucher system would give control to parents to select the school that is best for their child. Vouchers would also allow children in low-income areas to escape the vicious cycle of poverty and go to a higher quality school so that they can get a better education. Additionally, private school vouchers would create direct competition between private schools and public schools and the competition will force all institutions to better themselves in an effort to attract students.

What is the argument against school vouchers?

For all the potential benefits that could come if state and local governments provided school vouchers, the policy also has notable flaws.  Opponents argue first and foremost that private school vouchers compromise the integrity of the entire public school system. The government operates public schools, yet it also incentivizes families to avoid them.  The conflicts of interest in this scenario makes it seem ineffective. Any public funding that goes to school vouchers is money that could have been spent improving the public school system, which cannot improve without support and investments from the government. Opponents also argue that many private schools are religiously affiliated and school vouchers provided by the government is essentially taxpayer funding of religious institutions.

How do school vouchers hold up in court?

The constitutionality of school vouchers has been heard in several court cases. Cleveland launched its program in 1995 in response to the city’s dismal public schools; however, because Cleveland’s program allowed students to use the vouchers to attend private schools with religious affiliations, the program was almost immediately the subject of lawsuits. Eventually, the question made it all the way to the Supreme Court in the 2002 case Zelman v. Simmons-Harris. In Zelman, the plaintiffs argued that the case violated the First Amendment’s Establishment Clause, which provides for the separation of religion and state. The court ruled that the vouchers could remain, because even though the religious schools were receiving government funding, the purpose of the vouchers was compelling and there were non-religious options possible. In addition, the program didn’t go to the religiously-based schools, but rather the parents and students who needed the aid, and the program didn’t proselytize or advocate for the religiously-run schools.

Case Study: Milwaukee Public Schools

Vouchers have been an option for students since the early 1990s, but whether or not the implementation has been effective is still up for debate. Thousands of students in Milwaukee take advantage of the voucher program, and like in Cleveland, many do end up in religiously-run institutions. The main question is whether or not it has worked.

The consensus seems to be: sort of. Evidence from the 2012-2013 school year shows that students in Milwaukee’s voucher program are not outscoring their public school peers as a whole on state tests. That sounds disheartening, and would seem to indicate that vouchers have been a failure, but there’s some evidence to suggest that the picture requires more digging than that. The voucher students have, in fact, scored better than their low-income public school peers. Also, test scores in the Milwaukee voucher program have on the rise, perhaps indicating that the program is on the right track.

Conclusion

The voucher system is a creative solution to a debilitating problem in the American education system — particularly in some of our low-income public schools. The argument for vouchers includes the ability for parents and students to inject more choice into their education — hopefully creating more competitive school systems. In practice, however, it hasn’t necessarily worked out to that way. They’re also expensive, and could lead to public schools receiving less funding in the name of creating stronger charter schools. While some students may receive a better education, students as a whole population are left in a worse position. What’s indubitable is that we’re really not sure about the ultimate effects of vouchers yet as there’s no nationwide system to study.

Resources

Primary

Wisconsin Department of Public Instruction: School Choice Programs

Cornell University Law School: Zelman v. Simmons-Harris

Additional

World Bank: How Do School Vouchers Help Improve Education Systems?

PBS: The Case For Vouchers

NJ.com: Christie Tours Pro-Vouchers, Anti-Union Message in Philadelphia

Washington Post: Are School Vouchers Losing Steam?

Carnegie Mellon University: Estimating the Effects of Private School Vouchers in Multidistrict Economies

Education Next: The Impact of School Vouchers on College Enrollment

WRAL.com: Voucher Bill Provides Public Money For Private School

Anti-Defamation League: School Vouchers: The Wrong Choice For Public Education

Americans United For Separation of Church and State: 10 Reasons Why Private School Vouchers Should Be Rejected

Sameer Aggarwal

Sameer Aggarwal was a founding member of Law Street Media and he is a graduate of The George Washington University. Contact Sameer at staff@LawStreetMedia.com.

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The Social Security program was enacted in 1935 to provide post-retirement income security for workers and their families. Since then, it has grown to become the world’s largest government program with a total expenditure of $768 billion in fiscal year 2012. Americans are seriously concerned about the sustainability of Social Security, which has led to questions about whether privatizing the system could be wise. Read on to learn about Social Security privatization efforts, and the arguments for and against such a move.

The Current Status of Social Security

Social Security isn’t in great shape right now. Various reports have estimated different dates at which the entitlement program may have difficulty paying out full benefits to those who should receive them, but the current most cited year is 2033. One of the big reasons for why Social Security is in big trouble is because of our changing demographics and health statistics. When Social Security was first introduced pre-World War II, people did not live nearly as long as they do today. In addition, the post-World War II Baby Boom led to a glut in our population size. Social Security’s forecasting methods weren’t able to accurately predict the situation we’re in now, where there are many healthy people retiring who will live longer than ever before. To put this into context, in 1960, there were about 5.1 workers paying into the system for every retiree; now the ratio has shifted to under 3:1.

What does “privatizing” Social Security mean?

Given Social Security’s current state, there have been solutions suggested to try to fix it. One of the most popular is privatizing the system. That would most likely mean creating individual private accounts for the workers. Those private accounts will be subject to more control by those who are paying in, and would be able to interact with the private market. The funds could be invested in things like private stocks, which advocates point out would boost workers’ rate of return.

The proposition of its privatization came into the limelight when George W. Bush proposed the Growing Real Ownership of Workers Act of 2005. The bill aimed at replacing the mandatory payouts from workers’ checks with voluntary personal retirement accounts. In 2010, Paul Ryan, a major supporter of privatization, attempted unsuccessfully to reignite interest in the idea in his Roadmap for America’s Future budget plan.

What are the arguments for privatization?

Proponents of privatization argue that the current program significantly burdens fiscal debt and will lead to increased debt and taxes for future generations. They claim that privatizing it will keep the program from collapsing in the future. It would actually lead to higher post-retirement earnings for workers or, at the very least, keep earnings at a relatively stable rate. Additionally, it would empower workers to be responsible for their own future.

Advocates for privatizing social security also point out that in the past, funds in Social Security have been diverted to pay for other things the government has needed to pay for, and then replaced in time. If Social Security was privatized into individual accounts, the government wouldn’t be able to take such actions. According those who want to privatize Social Security, doing so would also help minimize the bureaucracy involved in the process.

Case Study: Chile

Chile’s post-privatization success is used as an example that the United States can learn from. Chile transferred to a new program in which  workers put 10-20 percent of their incomes into private pension funds. When the worker retires, an insurance company gets involved to help with the dispensation of money, but even at that step the Chilean worker has a lot of choice and flexibility. Although long term effects of the plan have yet to be discovered, the short term effects are positive.

What’s the argument against privatizing the Social Security system?

Opponents worry that privatizing social security will lead to risk and instability in post-retirement earnings and cause significant reductions in the same. They argue that privatization can also potentially place minorities at a disadvantage, as well as anyone who doesn’t have the time, knowledge, or desire to effectively manage their account. Many also claim that the media has exaggerated the program’s financial demise and that its balance is currently in surplus with most Baby Boomers currently in the workforce.

Those who argue against Social Security privatization have also expressed concern about the financial and logistical resources that would be needed to start a privatized Social Security program. They also believe that a move toward privatization would create more, not less bureaucracy, because of the complexity of private markets. Several groups and individuals, such as the Center for American Progress and economist Robert Barro oppose the idea.

Conclusion

It’s no secret that Social Security is currently struggling, and if something is not done, it will continue only get worse. There’s no easy answer, but privatization is one frequently suggested option in the public debate. Exactly how privatization would occur, what its benefits and downsides would be, and its overall effectiveness are still up for debate, but for now it’s definitely an idea that we can expect to see on the list of possible solutions for the foreseeable future.

Resources

Primary 

Social Security Administration: A Program and Policy History

Social Security Administration: The Social Security Act of 1935

Social Security Administration: Fast Facts & Figures About Social Security, 2012

Social Security Administration: The 2013 Annual Report of the Broad of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds

Social Security Association: Privatizing Social Security: The Chilean Experience

Additional 

Daily Signal: Social Security’s Unfunded Obligation Rises by $1 Trillion

CATO: Still a Better Deal: Private Investment vs. Social Security

Safe Haven: Privatize Social Security Before I Spend Your Pension

Sun Sentinal: Privatization Would Help But Liberals Resist Changes

Independent: Privatizing Social Security the Right Way

Freedom Works: Chilean Model of Social Security

NCPSSM: The Truth About Privatization and Social Security

Economic Policy Institute Report: Saving Social Security With Stocks: The Promises Don’t Add Up

Fortune: Privatizing Social Security: Still a Dumb Idea

Center on Budget and Policy Priorities: What the 2013 Trustees’ Report Shows About Social Security

CATO: Speaking the Truth About Social Security Reform

AARP: In Brief: Social Security Privatization Around the World

National Bureau of Economic Research: Social Security Privatization: A Structure for Analysis

NEA: Social Security Privatization: A Bad Deal for Women

Salome Vakharia

Salome Vakharia is a Mumbai native who now calls New York and New Jersey her home. She attended New York School of Law, and she is a founding member of Law Street Media. Contact Salome at staff@LawStreetMedia.com.

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