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Austin uses incentives to lift children out of poverty
Eli Dile   on Wednesday, November 15, 2017 at 9:00:00 am

Austin is a singular place, with a world-renowned tech and music scene, but it is like many other cities in its economic disparity. To correct this imbalance, the Texas capital has debuted a new kind of incentive that focuses on education rather than job creation or capital investment.

The Einstein Challenge is a performance-based incentive awarded to tech companies in exchange for educating impoverished youth for jobs in high-paying STEM fields (CitiesSpeak). The program aims to create a “Generation of Einsteins” among minority children and break the cycle of poverty. The goal is to reduce poverty 25 percent by moving 40,000 impoverished children into STEM jobs with an average salary of $100,000.

“Depending on your view, this is either an economic development 401 K, or a GI Bill of sorts, but for youth in poverty,” according to Kevin Johns, Austin’s director of economic development.

Engaging the private sector is key because tech companies not only have the training capability but also understand the types of jobs that are in demand. There’s no script for companies to follow, and they can design educational content in whatever way they choose, so long as they meet certain targets. Companies can either train students directly or arrange for tutoring or other forms of experiential education.

Participating employers receive a monetary incentive in the form of a property tax abatement that is reviewed every 10 years. But they also gain confidence they will have a skilled local workforce to draw upon for years to come.

More details about the program are available from this spring 2016 report (PDF).


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