Is giving people cash working? Six months of Denver's Basic Income Project
denverite.com
denverite.com
In terms of housing, the $1000 a month group only improved by 6% more than the $50 group. That is to say, even if you just give people enough money every month to get an apartment with a roommate, only 6% will actually use it that way.
In the actual report [0], they measure financial well-being, which improves across the board but does not differ between treatment and control. Surprisingly, measures of stress and anxiety actually increased for the treatment groups and decreased for controls.
There were a few positives - the treatment groups were somewhat more likely to get jobs, and used fewer services.
Obviously the organizers of the study want to promote its success, but I think most of what we see here is that homeless is a transient condition for some people, who find housing regardless of intervention. Mainly it's a demonstration that the extra $950 per month does surprisingly little in this population.
[0]https://drive.google.com/file/d/1gqtOfZG2sSanWgUdzn-lx-pwSXZ...
6 percentage points more, not 6% more. Kind of a big difference. A 26% increase is 30% more than a 20% increase. Group B has a 75% increase in participants finding housing compared to the control group.
> That is to say, even if you just give people enough money every month to get an apartment with a roommate, only 6% will actually use it that way.
While that is statistically correct we don't know why it is only used that way 6% of the time. The greater increase in the lump sum group could indicate that the $1k/month group couldn't pay for application fees, deposits, or other upfront costs even if their supplemented income otherwise could sustain the monthly costs of housing.
Percentage point changes are the right measurement. If the treatment group rose by 1%, and the control group rose by 0.1%, would you be excited that the treatment group was 1000% higher improvement than control?
I'm not really contesting what the right measure is, I'm pointing out how substantially different the two are and that its important to be clear which one you're using.
It makes sense - housing tends to cost just a bit more than that. Just two or three times more.
It can often be better spent on things that matter more than housing, especially if one doesn't want to live with a roommate.
I wouldn't think this way personally, I would want somewhere to live at the bare minimum. But homeless is an entire spectrum.
As and aside, it's fascinating how effective the $50 is. It definitely does look like you get diminished returns quickly, though.
(From TA) "staying in housing they rented or owned"
I suspect there's something not being captured here. I'm wondering if there's somehow an option in between "staying in housing they rented or owned", and homelessness.
Perhaps, they're managing to staying with friends and family for part of it. I could see there being some gray area here. The morality of intentionally staying homeless to save money could be debated in various scenarios.
It's also ignoring a number of other dimensions of wellbeing that did improve only in the higher paid groups. Feeling safe where they slept, welcome in society, and maybe most importantly employment.
It's only if you look really close at one metric, which has moral judgements attached to it, and maybe explainable by living arrangement other than pure homelessness (keep in mind the criteria "pays rent or owns house") that things look so pessimistic.
Seems like the discourse on this topic is not permitted to involve the happiness, security, and likely long term outlook (due to being more employed, not just happy feelings). According to your analysis, we basically disregard the wellness of the homeless, and are only permitted to consider how it impacts us.
This is not an unfair critique, you mention some of these things, but they're handwaved away. I think you got the mental health aspect wrong, but quite frankly the results are confusing and a little mixed. The article itself doesn't do it justice.
It should be noted though that this is also trying to completely turn around someone's life, according to one metric for $6000 in 6-months. They know it's gonna end in 6-months. You can only do so much with this. I know you're using the term in the study, but this says nothing about universal basic income, or long term base assistances.
Also, I can't help but note all participants mental health was shown as decreasing, which is just odd. I double checked and it looks like this is 6 months from enrolment, so this is right after getting booted from the program. This is not a shock. People with mental health problems have issues leaving programs THEY paid for.
There have been many trials and this is again and again the most stunning conclusion (I doubt this one is even a good example) It is kinda silly how obvious it is in hindsight: A person living on 1 dollar per day will leverage the hell out of 10 cents extra.
What happens in Denver is just a social project, the only thing mildly special about it is that recipients didn't have to do anything in return. But there have been many of such projects in countries all over the world.
If you want to understand more about their study, their methods are available. It answers a lot of the comments below. They do make a distinction and call this "Guaranteed Basic Income" since it targets a subset population: https://static1.squarespace.com/static/64f507a995b636019ef88...
No, it isn't. You can't study UBI by giving income to people who don't currently have income. To study universal basic income, you have to give it to everybody--the same amount--including people who already have income, even people who don't need any additional income. And then you can look at all of the effects, negative (people ceasing to work, or not working as much, because they are now guaranteed a certain amount of income independent of how much they work--meaning that overall production of goods and services might go down even as demand goes up) as well as positive (people who previously didn't have income now having it and therefore having more options).
Studying having the spending of the income not be restricted might be worth doing, but that still doesn't make it a study of UBI, because having the spending be unrestricted is not the critical feature of UBI. We already have social programs that give income whose spending is unrestricted, such as SSI and SSDI. What we don't currently have is a program that gives the same income to everybody regardless of need or anything else. That is the key feature of UBI that would need to be studied if you want to claim to be "studying UBI".
Also there are other implications, I’m not even sure what’s the point in calling this UBI (the data might of course be still valuable for other purposes).
Where are you getting this? The article is indicating that only people experiencing homelessness were given this, and its indicating quite a few of the participants of the study got off the streets and even out of shelters.
Not everybody is homeless due to their financial mismanagement, some people just get runs of bad luck.
Yes, which is why this is a has nothing to do with UBI. Cash based welfare payments are not a particularly novel idea and there is plenty of data why do they work/don’t work.
> Not everybody is homeless due to their financial mismanagement, some people just get runs of bad luck.
Of course. However on average they are probably significantly more likely to mismanage that money than other groups.
Shouldn't they worry more about questions that are related to whether UBI gets implemented in the first place? For instance, whether there's a work disincentive associated with it, or whether the program is cheaper than regular welfare. Figuring out answers to the questions you listed is putting the cart before the horse.
People frame it like that, but in practice it would be offset by increased taxes for most.
For example, everyone gets $20,000 per year as "universal" basic income. However, your taxes go up $20,000 per year or more because you weren't in the lowest tax bracket. We have to pay for the UBI somehow.
UBI of a substantial amount would be incredibly expensive. Expensive to the point that the taxes would have to dip all the way down into the middle class to make it work. So for the average person, that UBI would come in and then go right back out as taxes.
The money has to come from somewhere. Taxes would go up to pay for it.
You can't have both UBI and the current tax rates.
Stock buy-backs don't create any value, or, if they do, it is obscure to me. You may get a one-time bump in capital gains tax, but it's nothing to build an economy on.
A million new dishwashers, though - that's taxable profit and increased emploment. Could UBI drive a virtuous cycle in which everyone gets richer? It certainly looks from here like inequality fundamentally shrinks the pie, even if it works out nicely for some eaters.
That’s not how UBI works. It’s not tied to quitting one’s job. Anyone working earns income from salary/wages in addition to their UBI. Unlike many existing entitlements, there is never a financial incentive to work less.
EDIT: I think I misread the whole thing, it really does not say "Universal" anywhere :) Anyway, I think someone, soon will try to use this project as an argument in favor of UBI, which is ridiculous.
Why's that ridiculous? Testing a small scale trial on the people most likely to be effected by a larger scale program seems pretty reasonable to me.
I mean, I know UBI haven't been tried at whole country scale, but the populist government in my country came pretty close, trying to bribe people with things like social security payments for parents (you get paid a pretty penny monthly for each child you have), or giving extra pension raises to retired people - basically giving away free money to everyone. And guess what? Inflation in my country peaked at 19% in February, luckily it fell down to like 8% in September.
Yes! Exactly. They will not work shitty jobs. Isn't that a good thing?
Which means that after short adjustment period, the prices will rise and you will still need the salary from that shitty job to survive.
Also, the average person will not have their income increase significantly with UBI. The money has to come from somewhere, and taxes will offset the gains for most. Wealthy folks may see their income reduced by a few percentage points. Poor people can easily see their income doubled.
Another factor to consider is that apartments, clothes, and food are not flatly limited, they're elastic. Currently people with no money cannot participate in the market, so UBI has the potential to drive prices down through demand as well. We're seeing a negative example of this with the current housing market; prices are rising quickly because only wealthy people can afford a house, and less and less affordable housing is created as it's not as profitable.
Imagine a country where average income is 2000 USD per month. Now, you give everyone UBI of 1000 USD per month, so the prices keep rising until cumulative inflation reaches 50% - now 3000 USD buys you exactly the same standard of living as 2000 USD used to do before.
So, inflation stops, but no one's life is better after UBI than it was before.
And of course if the government decides to raise UBI from 1000 USD to 2000 USD then the next wave of inflation follows, cancelling any gains once again.
This does not follow. Many people may find they have the same quality of life as before. This isn't a failure. The relative significance of $2k is much greater to someone making <$2k (>2x increase) than someone making >$2k (<2x increase). It seems like in terms of influencing behavior, the greater effect would be felt by the poor, and there's more poor.
That only works on individual level, in a world without inflation. it does not work when when you give money to everyone. Yes, I agree, rich people won't even notice that extra $1k of UBI in their pockets. And they also won't notice a price of pizza going from $20 to $30. Poor people, however, will stay poor.
As a general principle: money is not a real thing. It doesn't exist. It's only a symbol, means of accounting. You cannot eat it, you cannot wear it. You cannot fix the poverty by giving everyone money if you do not increase the amount of goods available for purchase in the market at the same time.
Right, so it's always in people's best interest to work harder, but $2k buys a lot more pizza than $0, regardless of price.
> You cannot fix the poverty by giving everyone money if you do not increase the amount of goods available for purchase in the market at the same time.
Supply is elastic. Increasing demand should indeed increase supply.
That's some Keynesian bullshit, supply is constrained by a lot of factors, demand alone can't increase it. And even when it does, the intermediate step is, guess what? Raising prices.
Because drawing conclusions about what happens if you guarantee income to everyone, based on studying a project that only guaranteed income to homeless people, is ridiculous.
> a small scale trial
Is not what this is. You can't have a "small scale trial" of universal basic income. That's the whole point.
Basic Income is part of Universal Basic Income, and I think it's pretty reasonable to expect some conclusions apply to each.
Since most people are not homeless, I have no idea why you think this makes it reasonable to extrapolate anything from this study to the case of actual UBI.
> Basic Income is part of Universal Basic Income
Not if it's only given to the homeless.
Some people are. They were given a basic income. Under UBI they would also be given a basic income. It seems crazy to me to suggest these are entirely uncorrelated.
> Not if it's only given to the homeless.
So I'll ask again, how does Basic Income for the middle class invalidate Basic Income for the destitute?
I can't tell if you are trolling or are actually confused.
The issue is not that the homeless people were given a basic income. The issue is that everybody who wasn't homeless was not given a basic income. So only a small fraction of people were given a basic income in this study. That is what makes it invalid as a study of universal basic income.
> how does Basic Income for the middle class invalidate Basic Income for the destitute?
This question is irrelevant since middle class people were not given a basic income in this study. Do a study where middle class people are given a basic income and then we can talk.
You're arguing with a strawman. It isn't a study of Universal Basic Income. This is a study of Basic Income and it's effects on homelessness, so the results of this study should reasonably apply to other situations where Basic Income is provided to homeless individuals (as it would with UBI). To be clear, "the results" are the effect of basic income on homelessness, and only the effect of basic income on homelessness. This is not a blanket endorsement of UBI.
I've been very deliberate with my wording to avoid absolutes. You seem to be suggesting that we cannot model anything at all. Yeah, I think that's insane.
No, I'm arguing with what you actually said at the start of this subthread. See below.
> It isn't a study of Universal Basic Income.
According to you, it is valid input to decisions about UBI. Here is the original post of yours (responding to Detrytus) that I responded to in this subthread:
XXXX
> I think someone, soon will try to use this project as an argument in favor of UBI, which is ridiculous.
Why's that ridiculous? Testing a small scale trial on the people most likely to be effected by a larger scale program seems pretty reasonable to me.
XXXX
Your contention that the study is a valid "small scale trial" of UBI is what I and others are disagreeing with. Nothing you have said changes that disagreement in the slightest; you just keep repeating the same contention we have already disagreed with, without addressing the issues we have raised at all.
> "the results" are the effect of basic income on homelessness, and only the effect of basic income on homelessness.
Which has nothing whatever to do with UBI. Nor is it a "small scale trial" of UBI. It's a study of the effect of providing basic income to homeless people and only homeless people. You can't use the results of that to conclude anything useful about what would happen if you provided basic income to everybody. This has already been pointed out to you multiple times in this subthread.
Sigh. I've been very deliberate with my wording, and I did not say Universal anywhere in my original comment. If this caused confusion, my follow-up comments should have made things abundantly clear, and I'm still waiting for a rebuttal.
If you insist on putting words in my mouth, know that you are arguing with a strawman.
In a similar vein, this is not the Alan Partridge Project, which is a band, and that fact was not mentioned in this article, furthering my initial confusion.
When you drill into it basic income advocates are just pushing for less punitive welfare.
It’s a noble goal but not especially novel.
What we need is a job guarantee:
(Now, obviously, taxes are kind of a grab-bag: it is hard to see, directly, how much of your tax dollars go to any one particular appropriation. But the point stands, and I think an easy approximation would be taxes paid * (UBI paid out / total appropriations) or so.)
UBI is essentially equivalent to having a negative tax bracket, and that bracket would only apply to some people. Necessarily to compensate for that bracket, some or all of the upper brackets must go up, in order to fund the lower bracket.
I.e., if the government writes everybody a $10k check, but due to doing that I now owe $15k more in tax obligations each year … I've not in any material way received UBI, even if there's a $10k check in my account.
Like, if you just wrote everyone a $10k check per year the resulting national debt alone would be absurd…? How would that work?
There are always going to be secular trends of surveyed people regardless of what they're given. First of all a lot of homelessness isn't permanent, so if you monitor a group of homeless people some of them will cease to be homeless over the course of time regardless of whether they're getting anything from you or even aware they're being monitored. And secondly people are aware they're being studied, and often react. That may be as simple and positive as doing more to help themselves because the nice person showed concern about where they'd be in six months time, but it may also be people acting or claiming to act differently because they believe the payments are linked to what they report (no matter how much surveyors insist it's unconditional and there's no judgement and no possibility of the experiment being stopped or continued...)
People like being given money. If you tell them you're conducting a study to determine if giving them leads to them doing XYZ, it should come as no surprise when they do XYZ, even if the money didn't literally enable it: they are incentivized to XYZ all they can in order to keep the money pump flowing.
All Media: is this experiment too extreme and weird to ever try out in practice? We ask these far out kooks if this off-the-wall moonshot could maybe someday happen in a dream land
* Group A reported a 26% increase in participants staying in housing they rented or owned;
* Group B reported a 35% increase in housing they rented or owned;
* And Group C, which received the smaller sum of money, reported a 20% increase in renting or owning housing.
But these are not actually percentages - these are percentage points!
* Group A went from 8% to 34% - a 4.25x increase
* Group B went from 5% to 40% - an 8x increase
* Group C went from 11% to 30% - a 2.7x increase
Which is a lot more dramatic than saying 20% vs 26% vs 35%.
The study authors might have good reason for reporting it this way, such as many participants dropped out of the study before follow-up, which probably skews toward people with more chaotic lifestyles. So the denominator for each group has changed at follow-up and could at least partially explain why all groups saw improvements.
The part about people dropping out is complete speculation, right?
And even if that occurred and the housing cost issue is avoided, companies of all stripes will be angling hard to capture people’s new additional income.
> On Tuesday, the group released data on the halfway mark of the pilot program, showing that rates of homelessness and food insecurity decreased, while shelter and employment rates increased over the past six months.
My current home costs around $1,600 a month, utilities not included.
e.g. https://sfbay.craigslist.org/search/roo?max_price=500#search...
I don't want to do that. I am not someone who needs to tire themself out working for the rest of their life. Yet that is what I would need to do in order to qualify for any support.
I have burnt out of at least 2 jobs already because of severe ADHD and this is just totally soul-sucking and terrible.
I have diagnoses of ASD and ADHD. They know I have both. Soon they'll know I also have DID. Maybe at some point they'll realize how much I need the help.
Anyway, sorry for veering off-topic.
But it does offer a viable solution for transient homelessness for working poor who might have lost a job, become disabled, been evicted, etc..
”We were already looking for a spot because I got into a housing program. [...] For the month, I need $3,000 to get through and live paycheck to paycheck. But then getting approved and accepted for it [DBIP], it was definitely a relief. I wasn’t going to have to come up with all the money for the apartment."
"I was actually able to pay off my debts literally just in time for me to get into a place, and I got the receipt just in time saying that I paid off my debt so that I was able to be accepted into housing."
"It's going to rent, to my car, to be able to afford living. To be able to go to this little program I’m going to for 22 weeks [of job training], to be able to make 50-60k a year. For me, that’s living life. That’s where I need to be. [...] Right now, the way I’m striving, I just feel proud."
> Denver citizens must be lucky.
LOL
If people have more money, won't it just increase the prices of things?
You can't just hand out money to people.
That's a huge [citation needed]. You're funding a program that would cost trillions of dollars per year — e.g., $10k/year (less than I pay in rent for a 1 bed…) would cost ~$3T/year. You're talking about a yearly expense that would outweigh all of Social Security, Medicare, and Medicaid, combined. There's no plausible way that that lowers taxes.
This is a feature. I think a UBI will be necessary in the future to just to maintain capitalism.
If automation eventually means the average person is unemployed who's going to buy your companies products?