Solve Homelessness: Cut Out The Middle Man
economist.com
economist.com
Based on the (admittedly not extensive) work I've done trying to help homeless folks get back on their feet, a lot of people do just need some money to get their life back in order. For instance, it's hard to apply for jobs when you don't have an address or a phone number for people to call you back at. Giving someone the ability to not have to worry about making their rent payment for a couple months can be huge.
But a significant portion of the cases I've seen can't be solved this simply. Despite what this article says substance abuse issues /are/ a big factor for a lot of the homeless people I've worked with. Providing cash money can alleviate some of their problems in the short term, but there are generally more fundamental obstacles that are holding people back. If you don't address these issues people can very easily fall back into the trap.
The best intervention I've ever seen for a homeless person is an employer who is willing to give them a steady job and be understanding about the difficulty of the situation they're going through. Anything that can get a homeless person to this point should be encouraged. Sometimes that can mean covering their expenses for a while to get back on their feet. But often it means providing substance abuse support; often it means teaching job skills; often it means connecting them with the right social service or civil society groups.
Unfortunately the burden on businesses for "hiring someone" is so high due to regulations that it only makes sense to make positions that are full time, or part time with dedicated hours.
There are a lot of jobs that could exist where people worked some number of hours when they wanted to work, but where if they didn't show up for several weeks someone else could be doing it while they're gone.
Businesses would be willing to hire people on such terms (especially for some jobs like construction, or cleaning, etc) but they have to create positions that are focused on specific people due to the impact of regulations.
Hell, under Obamacare anyone who hires a kid to mow their lawn and pays them $400 over the course of a year has to file a 1099 on them!
Same thing as when you try to convince an employer to let you go home early when you work a little harder and manage to get 8 hours of work done in 6 hours. That's just not the way things are done, so slow down already!
Also, I fail to see how regulation has prevented this from happening. Do you have any evidence you could point to? Lots of businesses have a big payroll of part-timers who only work a few hours a week. Speaking from personal experience, when I used to work these kinds of jobs many of my coworkers (myself included) had extremely flexible "work when you can" schedules. Lots of transient employees, too. For some industries this works, but for most non-minimum wage jobs frankly I don't see what the incentive for an employer to do this would be.
There are such things as day labor positions and in many cases these people are taken advantage of because there are no regulations in place to ensure they are getting at least minimum wage.
Most low end jobs are service sector jobs that require a certain number of staff be on hand at all times to service customers. It's not going to work if you have 10 employees show up one day of which only 3 you can use, while the next day you only have 1 employee show up & you're short staffed.
In a lot of cases many part-time jobs offer rubber banding hours. You may have 25 hours one week and then 10 hours the next week. It's very hard to work around & in many cases it can interfere with your schedule. Your work usually wants you to be there regardless of other obligations or else you're fired. This has to do with workplace policies and not regulations.
As far as the employer side goes, if you are going to invest time and money into a new employee, you want to make sure this employee is going to make a good return on your investment. If the person shows up smelling bad & reeking of alcohol or is high, this person probably has issues that a three-day on the job training course making sandwiches is not going to fix and may end up costing your business a lot more money than they would bring in. Training employees is not cheap. Training 100 people, when only 20 will show up on a regular basis is essentially asking business to throw money out the window.
I laugh at the idea that you would want to hire people who have drug abuse problems to work with dangerous construction equipment or allow them on your premises, possibly unsupervised, to clean.
Usually flex-hours make sense for higher end positions where there are obvious goals set & your product may not be entirely physical in nature. Rarely will you find flex-hours viable in low-end service sector or manufacturing.
Usually the homeless have a multitude of problems. They need drug-detox, healthcare, housing and education. All of which will cost money. Putting this burden on business is not viable, there is no incentive to do it.
Under the new health care legislation ? No. What you are describing has been an IRS requirement for many years. One that was mostly ignored. The congress wants to close the loophole (but the way they wrote it is rather brain damaged).
For example: the City of San Francisco spends $70M per year (about $10K per homeless person, given that the population of the homeless is just under 7K). On top of that you have churches and other charities helping out. And yet I see homeless people all around, sleeping in doorways, on sidewalks, etc. Heck, in the shadow of City Hall you'll see dozens of homeless people.
But the department of homelessness (I don't recall the name of the department) was filled with people from (ex-mayor) Gavin Newsom's campaign staff (from his unsuccessful run for Governor). There is no accountability. There are no metrics on how many homeless people are in the City. All we have is a massive bureaucracy that is making a living off of claiming to help homeless people.
Thats $87 per citizen in SF.
That accounts for 0.39% of my taxes in a given year, and I don't even make that much money because I just graduated college.
I'm saying, $87 a year out of my taxes is a tiny amount when you consider what you pay for other things. How much do you spend a year on defense? Since the effective tax rate is around 30% (roughly) and the defense budget is around 20% of the federal budget (roughly), I pay around 52x more for defense than for helping homeless people in a given year. Is defense 52x more important than social services? And I say this being a defense contractor who entire livelyhood depends on taxes and the military industrial complex.
Otherwise, what would the state be doing? If the state spends a bunch of money on roads, it spends it on roads in towns. You might be driving down the street in your town seeing construction, but that money came from state taxes not town taxes.
The same goes for programs big and samll. Medicaid is money collected on the federal level, but paid out on the state level.
It is outrageous indeed. Every time I walk by a homeless person sleeping in the cold on the sidewalk, I am reminded of this figure.
Yeah, that is kinda the dirty little secret of the homelessness "industry". Take Shelter, by far the most well known homelessness charity in the UK. Do they actually run hostels and soup kitchens? Well, actually, and this comes as a surprise to most people, they don't. They just transfer money from their donors to "think-tanks" and well-paid consultants. It's a huge racket, but since they have glommed onto a "worthy cause" they're untouchable.
http://england.shelter.org.uk/__data/assets/pdf_file/0010/29...
Money out £45.9 million; Housing and legal services: £27,809,000.
For people struggling to get by, getting legal aid to prevent them losing their house is priceless. They cannot afford to pay a lawyer, so that kind of donation to pay for one is incredibly important to them.
There is a line item for "housing services" which cost 21M and employs 441 people. But I can't find where they explain what all that money went to. It can't be housing aid because that's a separate line item. It's odd that they detail exactly where the 355K went to, but not the 21M.
It's reasonable to assume the 21M is salaries for 441 people. So to a first approximation, this organization doesn't actually give out anything except advice. Their second key goal is "To make monies available to housing associations", but I only see some token grants, dwarfed by their advertising budget.
That may all be well and good and necessary and proper for the situation in the UK, eg they lobby for govt funds that go direct to housing assocs. I don't know enough about it. But if their public image is of an organization that runs soup kitchens and provides housing, it's not supported by this report.
However the UK Government's 2009/10 social housing budget was £3.3bn. £50m is a drop in the ocean in this sector.
I'm not too concerned about their size relative to the whole "homeless budget", but how much of their income is spent on direct benefit to the people they are chartered to help. I'm also concerned about their "implied accomplishments" versus their actual accomplishments,ie image vs reality.
From what I can tell, about 60% of their income goes to the salaries of front-line people (legal and housing advice). 28% went to operational expenses (fundraising and "shelter shops"). The rest is advertising and paperwork.
http://en.wikipedia.org/wiki/Working_tax_credit
[NB I think the problems were more to do with the poor implementation of the scheme rather than the idea itself].
You have to make sure that the effective marginal tax rates stay low, even on small incomes. That's something lots of welfare payments get wrong.
Below a certain income level in the Australia and parts of Europe (in all probability) you not only pay no taxes but you get low income credits. This is a negative income tax as you describe it.
The problem? Let me give you an example (and this is purely fictional):
Joe earns $5,000 a year in part-time work. He pays no tax. He gets $2,000 a year in government assistance.
Marginal rate of tax: -40%. Net income: $7,000 Total tax rate: -40%
Joe finds a better paying job and now earns $15,000 a year. Now he's paying $3,000 a year in tax and his low income tax credit is gone.
Marginal rate of tax: 30% Net income: $12,000 Total tax rate: 20%
Seems reasonable right? Now consider the difference:
Extra gross income: $10,000 Extra net income: $5,000 Marginal rate of tax: 50%
You see this with government benefits (that taper off and then cut out at certain income levels). The marginal tax rate low income earners end up paying can be well beyond 50%. Add in child support and this can go over 90%.
Call this a disincentive to work.
Let me give you a concrete example:
http://www.centrelink.gov.au/internet/internet.nsf/payments/...
> Income over these amounts reduces your rate of pension by 50 cents in the dollar (single), or 25 cents in the dollar each (for couples). For transitional or saved cases, income over these amounts reduces your rate of pension by 40 cents in the dollar (single), or 20 cents in the dollar each (for couples).
Bear in mind that you're losing 50 cents of tax free income for every $1 of taxable income that you gain.
A local paper here just ran an article¹ about how a state rep was indignant because, out of about $50 million the state gave out in welfare-benefit debit cards last year, about $200,000 was spent on “non-essentials” (principally, at liquor stores²). $827 at Victoria’s Secret outlets! $664 at pet supply stores! For shame!
¹ http://www.bostonherald.com/news/politics/view.bg?articleid=...
² I don’t know if these guardians of the public purse confirmed that this money was spent on liquor and not on, say, chips and peanuts.
But there are a lot of homeless that find participation in a system that is designed to control them demeaning and won't participate. Among these are many skilled people who became homeless during a rough patch and simply can't get back into society because they have no place to take a shower with their own phone and a bed where they can get rest and then go on a job interview or go out and round up clients for work even. Being in the shelter system often means you have to get in line hours in advance for a spot, and have to follow various rules that prevent you from having time to get a job.
Some friends and I had created a small unlicensed shelter one year for homeless people that didn't want to participate in the normal system. We had a bouncer who screened for drugs and other than that there were no requirements. Homeless people responded well to this and began policing themselves and reporting on troublemakers (sneaking in drugs.) We did have people come in to volunteer. Talking afresh to the guests, people found out their history and skills and a network of impromptu referrals was set up which managed to get the 50% of them that wanted a new start into jobs and houses. There were no relapses or problems with these as they were men who had fallen on hard times but who were clean and wanting to work and had skills. Simply finding them a stable place enabled them to fix their own lives without guidance or control from others, neither of which they wanted. That left another 50% that was truly transient or didn't want to work.
Once you institutionalize the system it becomes a method of controlling people. A lot of people don't want to be controlled.
Now that's my experience. In cities, there's a problem with the long term chronically homeless. People who never made it back and who have given up. The issue with this minority of homeless is that they cost a fortune in medical, police and other services each year. For example, if it gets very cold and you can't find a bed then you commit some petty crime to get arrested. Or they might injure themselves when desperate just to get a place to stay at the hospital. Or maybe they are just very ill. There are some homeless people in cold cities who have medical problems who are costing more than $1 million a year in public services.
There's a homeless advocate Philip F. Mangano who was "homeless czar" under Bush who has promoted the idea of finding no-questions-asked housing for the chronically homeless. This is not the people who can find a job with a stable place who just need first month's rent and a deposit, but people who are not going to be able to work long term and who are costing a fortune. Placing them in public studio apartment housing at a cost of perhaps $8,000 a year in rent saves money over all. One key is no restrictions. They can bring in alcohol and drink in their room. They can come and go at all hours. It is their own apartment. When presented like this, they are more likely to take the deal and get off the street.
Does it cost money to do this? Yes. But the idea is that it costs less than providing ad hoc services. Having a stable place makes them more likely to make doctor's appointments. No longer are they coming to the hospital with costly to treat hypothermia or frostbite.
Here's a couple articles about Mangano's work: http://articles.sfgate.com/2004-01-14/news/17408204_1_mangan... http://www.washingtonpost.com/wp-dyn/content/article/2008/12...
There are those, which I wish were given a more logical and critical eye, who will never attain employment. There are also those (many) homeless who are mentally ill. These people are often categorized as the unfortunate, but more often than not are simply disenfranchised with the society we've created. For the homeless who are mentally ill, disabled or otherwise unable to hold employment it is critical that we take a different approach. A long term, critical-thinking approach. Present the numbers to the population. The math is remarkably simple if you take the time to understand the people and their relationships with commonplace society.
The right-leaning tend to worry about conversations like this, fearing it will stir up laziness and cause mass exodus of labor force. While there may likely be a percentage of that, the overall outcome would certainly be less homelessness, less crime, less strain on the public system and in the end a better economy for all.
I think helping homeless people by giving them housing is a good idea, but it should be very limited housing with a lot of incentive to want to get your own place. It should not be a three bedroom apartment, especially when other people have to wait.
Many people I know, including myself, have suffered through a cramped studio or similar situation in order to save money and I see no reason why others cannot. Its a billion times better than living on the street.
For those engaging in charitable efforts, such a gift can be given to 5 times as many people as a more comfortable, "I'll just stay here forever" situation.
The idea with these programs is that it's for the chronic long term homeless. So to qualify for a free apartment to work on your startup, you'd need to first spend 10 years on the streets, get diabetes or aids, and have a foot amputated. This is a big hurdle for most people looking for a free apartment.
There's many different categories of homeless. One of the most difficult to resolve is the long term chronic ones. Pretty much nothing tried has worked. However, pilot programs offering apartments have worked, at least it has reduced the cost of handling them and increased their quality of life. We are talking a small number of people, perhaps a few dozen in a big city like Chicago or New York or London. These are the guys that the police and social workers and hospitals all know by name because they are dealing with them every year for more than 10 years.
Given these constraints, do you agree that there is not a risk with moral hazard as implemented?
Of course there is the risk that such a program would be expanded to the point where it would become either a moral hazard, or become a substitute for welfare programs that deal with long term structural issues of unemployment caused by globalization and other factors. As a theoretical outcome in the future that would require many hypotheticals to happen first. It would be something of a slippery slope to consider it as a criticism of a program that seems to work to help long term chronic homeless get off the street while costing society less.
(And in the USA that would be even more pronounced, because people without medical coverage often wait until their conditions become an emergency.)
There was an article a few years ago about some homeless people in L.A. or so cost the state so much, that just paying for their housing is cheaper.
The arguments summarized here on Wikipedia are a good introduction to some of the issues in play here.
So £26,000 vs. £794. I'd like to see this replicated.
But they can't because students and recent graduates and stay at home moms, etc, get the minimum wage jobs.
If we eliminated the minimum wage, then all the jobs that need doing, but whose economic value is $2.75 an hour would come into being. This means that the homeless person would be able to earn that $1,300 in two months. If low cost housing were legalized, they'd be able to live cheaply while getting on their feet and saving for getting a better job.
Minimum wage is the idea that we'd rather have someone homeless and not working at $0 an hour than have them have a home and be digging themselves out working for $2.50 an hour.
I don't agree with minimum wage. But there are other barriers to full employment, too.
You start with $1000 and need to survive the month while trying to get a job, live, eat, etc. A few frustrating choices along the way that might not seem realistic, but may prove insightful for some.
I mean, it was rough, and I had to tell my kid no a bunch of times and we aren't eating all that great (and I had to avoid playing the lottery and miss a friend's wedding). It was interesting, and reminded me of Morgan Spurlock's "30 Days" show.
1. Minimize income tax.
2. Maximize wealth tax.
3. Impose tax on idle cash.1. Provide only essential government services
2. Enforce the law for everyone--no limited liability, no secret police, no pollution quotas, no wars of aggression
3. If they aren't hurting anyone or the environment, leave productive people and their wealth alone
I think we should aim for the government only providing essential services. But one of those services is making sure everyone has healthcare insurance available to them at a rate that they can afford.
You and I know probably agree on very little about the size of the government, even though we both agree that the government should aim to provide only the minimum essential services.
In other words, I'm just as happy to see someone like Dennis Kucinich do well as I am Ron Paul, even though ideologically I agree more with Paul. I think we should be more concerned with replacing evil people with good people than the particulars of one platform or another. The common grounds (stop the wars, stop corporate welfare) are vastly more important than the differences like health care or welfare for people who actually need help.
1-Stop contributing to society. 2-Start living as parasites from more hard working, efficient people. 3-Eliminate freedom to choose what to do with your salary money, so nobody wants to work, everybody wants to parasite.
Totally brilliant, what could go wrong about that?
Yet today, countries with better social safety nets have stronger economies, and Warren Buffett has consistently argued for higher effective taxes on the ultra-rich.
The money the government spends doesn't just get burnt into thin air. It gets paid out in a bunch of government contracts, those contracts buy products and services provided by private companies. Those private companies employ a lot of people and buy more products from other companies that employ a lot of people.
For better or worse, you need to recognize what happens when you cut government spending (a lot of people get fired, a lot of companies lose contracts) if you want to understand why people oppose cutting it.
As it is the shelters are all government run and sane homeless people avoid them because of rampant drugs and sexual abuse.
There are many cities where these permitting and zoning laws work as a subsidy for wealthy people. For instance, they do not want walmart and they do not want more apartments built in my town (which is a very liberal university town) because they want to "preserve its character"... but they go way overboard.
The effect of this is that home prices go up significantly and they profit when they sell.
This seems to be common among towns up and down the west coast. I've seen it in California, Oregon and Washington.
Artificial constraint on the supply of homes means more homelessness, but also, more returns for homeowners there.
So, they have a financial incentive to vote to prevent these apartments from being built.
And I'm talking $600-$1,000 a month apartments, not even cheap housing.
Not because all persons who live in such places are always and inherently bad, but because a much larger percentage of the people who can only afford such places do have certain cultural, behavioral and educational qualities that cause them to breed such things. You enable the Ramen-eating college student to live there, but also the basket case. The struggling artist but also the drug-dealer or gang member. The single guy living alone for the first time with an apartment full of books, but also the extended family of 10 immigrants with 5 kids and varying degree of legality, all of whom who will be consuming government services and imposing government costs and externalities out of proportion to their taxable income contributions back. Having a town where the prices are so high only doctors and lawyers can afford to live might mean there's less diversity, but also the streets and lawns will be nice and safe and quiet, speaking in general. Given a choice only between these two imperfect extremes I know I'd take the second one.
...I'm not sure where I was going with that, but even at $10/night that's the same you're paying in Pittsburgh.
You're thinking of Larry, the shoe-shine guy: http://articles.sfgate.com/2009-06-04/news/17208451_1_larry-...
The local media indeed jumped on it, and raised a stink.
I have a friend who spent 4 days in jail because he was caught near a bar without a drivers license. He didn't have ID, couldn't prove who he was and got locked up. They didn't let him make a phone call, and he stayed there until they decided he'd "learned his lesson". This one was sometimes homeless, but not a drunk or drug user. Just lost his ID.
It's called "Monotributo", if you speak Spanish look it up.
(*I believe the same works in Argentina)
Wait... what? To me, that just sounds evil. Why shouldn't I be able to walk around without any form of identification?
I genuinely want to know - is it really mandatory to have some form of identification on you at all times? Sometimes I just don't - should I worry?
However, that does not mean the police won't put you in jail for not having ID, though they have to let you out eventually. This has happened to me.
At this point in the discussion someone cites the Hiibel decision: http://en.wikipedia.org/wiki/Hiibel_v._Sixth_Judicial_Distri...
That decision is that states with stop and identify laws, can require someone to identify themself when there is "reasonable suspicion" a crime has occured, which is also knowns as a Terry stop. The decision does not say you have to have government ID in those states. It says you have to identify yourself. It is sufficient to state your name and birth date for these purposes.
Again, that doesn't mean police will follow the law. Most of them don't.
If you're going to be handing out money, it would be better to give it to genuine charities that have an interest in helping the homeless. They generally will be better (imperfect of course, but better) at spending the money to help the most people.
The homeless oriented charities I'm aware of do amazing things with small amounts of resources, and they have to scrape by.
A real shame when we're blowing a $3.7 trillion dollar budget every year.