The right has long held that homelessness is a symptom - of a lack of self-control, a lack of foresight, of addiction, mental illness, etc - and therefore the solution to it is training, incarceration, rehab, or rigid discipline.
None of this stuff worked.
For more than a decade, there’s been a more pragmatic approach to homelessness: giving people homes. The housing first movement has repeatedly shown that the best way to make homeless people not homeless is to give. them. a. home.
After all, if you are struggling with addiction, mental illness, etc, or if you eed structure in your life, the chaos of not having a home only makes this a thousand times worse.
(Oh, and giving homeless people homes is MUCH cheaper than treating homelessness as a crime)
In a similar vein, the Foundations for Social Change’s New Leaf Project tried simply giving homeless people money (CAD7500). If the right is correct and homelessness is a moral failing, then this should make everything worse (“they’ll just blow it on drugs”).
So this experiment isn’t just a test of the best way to address homelessness; it’s also a test of whether the right’s frame of homelessness as an individual failing is correct, or whether the left’s conception of homelessness as a system problem is right.
The results are definitive: 18 months on, grant recipients found housing a year earlier than the control group; 70% experienced less food insecurity. Money went to food, clothes and rent, with a 39% decline in spending on booze, drugs and cigarettes.
The randomized, controlled study had 115 subjects aged 19-64, all of whom had experienced homelessness for at least six months. On average, they saved CAD1000 of the initial grant over the 12-month study. Participants spent more on their kids and other family members.
The participants’ 12-month, $7500 cash grants amounted to less than half of what it costs to billet a person in a homeless shelter over the same period.
This is both amazing and obvious. The best cure for homelessness is a home. The best cure for poverty is money.
It’s a very powerful argument for a basic income, too.
But not necessarily for a UNIVERSAL basic income.
Here’s the problem with UBI: imagine two people, one of whom is in the 10% or 1% or 0.1% and has all their needs met every month; the other person does not.
Give each of them $1000/month. The poor person experiences a huge difference in their life: they go from not having their needs met - that is, not having a home or food or utilities - to having them met. This is transformative.
What about the rich person? Well, they put the money in a 401(k) or other tax-advantaged savings.
Fast forward a decade.
10 years later, the poor person still has their needs met. They have better health outcomes, their kids have better educational outcomes. SUCCESS!
The rich person, meanwhile, is A QUARTER MILLION DOLLARS RICHER, thanks to the miracle of compound interest.
We have reduced one of the worst aspects of inequality, but inequality itself remains intact, along with all the toxic, corrosive problems it creates.
The system remains rotten to the core.
Can we get the benefits of UBI while still addressing inequality?
Yes. Basic income remains a no-brainer. The problem is universality. We shouldn’t give subsidies to rich people.
But that doesn’t mean we should do means-testing.
Means-testing is humiliating and cruel. Universal services promote solidarity. Means-tested services are a form of Apartheid.
Imagine if you had to prove your poverty before you could go to a public library, or let your kid play in a public park or attend a public school.
But public parks, schools and libraries are a subsidy to the wealthy. We could insist they use country clubs, private schools and subscription libraries instead.
It’s easy to understand how this ends: wealthy people use their political power to defund the public sphere.
The money they’d lose by having to pay for country clubs and private schools wouldn’t reduce their spending power enough to prevent them from accumulating outsized political power.
To do that, we need to tax them.
That’s what taxes are for: to reduce the private sector’s spending power so that when the government creates new money to fund the programs we need, the new money isn’t competing with the money that’s already in circulation for the same goods, which creates inflation.
Governments, after all, don’t pile up our tax money and then send it out again to pay for programs. When currency-issuing governments tax their citizens, they just annihilate that money. When they pay their citizens to do things like build roads, they create new money.
All the money in circulation is money the government has spent, but hasn’t taxed out of existence All the money you and I have to spend is the government’s deficit. If governments don’t run deficits (if they taxed as much as they spent), there’d be nothing left for us!
Federal taxes don’t pay for programs, but they DO something important. They keep rich people from getting too rich - getting so rich that they can distort our political process.
High tax rates on top wages and wealth solve the UBI vs BI conundrum without cruel means-testing. If you’re rich, you get the UBI, but you lose it at tax-time; just like you get to use the library for free, but we tax away the money you saved by not going to the bookstore.
All of this also reveals the incompleteness of cash transfers. As powerful as this experiment was, it is even more exciting when combined with Housing First (if you think finding a home in a year is a good outcome, imagine how great getting a home TOMORROW will be!).
Likewise other progressive, universal programs like a Federal Job Guarantee, which would set a TRUE minimum wage - the wage every person who wants to work is guaranteed, irrespective of whether anyone in the private sector wants their labor.
Without such a guarantee, the true minimum wage is $0 - the price your labor fetches if no one in the private sector has a job for you.
Such universal programs must be complements to social programs like direct transfers, disability benefits, etc, not replacements for them.
When the current crisis is over we’re going to face a massive unemployment and homelessness crisis. The private sector won’t be able to solve it. The right’s version of fixing this is workfare: Build Trump’s wall or starve.
We need a powerful progressive alternative: grounded in caring, universality, and repairing the Earth. Direct transfers, housing first, and a jobs guarantee are policies that work:
- Need money? Here’s money.
- Need a home? Here’s a home.
- Need a job? Here’s a job.
If those sound expensive to you, consider the unbearable cost of mass poverty, homlessness and unemployment.