Busting a homeless stereotype

[inspired by a Vox article]

A study conducted by the charity Foundations for Social Change identified 50 Vancouverites who became homeless in the past 2 years. They were each given a lump sum of $7,500. No strings attached. They also got access to workshops and coaching focused on developing life skills and plans.

The study followed up with the recipients periodically, to see how they were doing and how the money was being used. A survey asked people how they thought the unconditional money would get spent by the study group. The answers suggested that it would get spent on alcohol, drugs and other temptations.

That’s not what happened. It was spent on food, clothes, and rent. They increased their stability and financial security. What’s more, giving out the cash transfers actually saved the broader society money. Enabling 50 people to move into housing faster saved the shelter system $8,277 per person over the year, for a total savings of $413,850. That’s more than the value of the cash transfers, which means the transfers pay for themselves.

This is also the general idea behind basic income. The government should give every citizen a monthly infusion of free money with no strings attached. This idea has gained momentum, with several countries running pilot programs to test it. The evidence so far shows that getting a basic income tends to boost happiness, health, school attendance, and trust in social institutions, while reducing crime. Recipients generally spend the money on necessities like food, clothes, and utility bills.

Canadian lawmakers are currently considering a bill that would create a national framework for a guaranteed income to cover basic living expenses for people over age 17. That would include temporary workers, permanent residents, and refugee claimants.