Giving Cash to Poor People Doesn’t Seem to Help

Casa Maria Soup Kitchen-a catholic worker house

Servant of God Dorothy Day

Kelsy Piper has an interesting article in The Argument online magazine entitled “Giving people money helped less than I thought it would.” The Argument seems to me to be an online op ed website, and this is the first I’ve come across it. If Piper’s article is an example of their work, I may be checking it out more often.

Anyway, Piper is disappointed to learn that giving cash to poor people didn’t help as much as she hoped it would. Research has been done on these programs for years, and includes subjects in experimental groups who had received thousands of dollars over years against people in the control group who either received nominal amounts of money ($20-$50/month) or nothing at all. This research has demonstrated that the money given to the experimental group made no impact on their mental or physical health, or even their standard of living. Here’s the money quote (no pun intended) from the article:

“Many of the studies are still ongoing, but, at this point, the results aren’t ‘uncertain.’ They’re pretty consistent and very weird. Multiple large, high-quality randomized studies are finding that guaranteed income transfers do not appear to produce sustained improvements in mental health, stress levels, physical health, child development outcomes or employment. Treated participants do work a little less, but shockingly, this doesn’t correspond with either lower stress levels or higher overall reported life satisfaction. Homeless people, new mothers and low-income Americans all over the country received thousands of dollars. And it’s practically invisible in the data. On so many important metrics, these people are statistically indistinguishable from those who did not receive this aid.” [emphasis in original].

What’s worse, Piper points out that the media are not reporting on these results. In fact, they either refuse to report them, or the find the thread of good news in the studies and report only that. Whatever the actual results, Piper claims, the media either twist it somehow to make it sound good, or simply don’t report on it at all. Indeed, Piper writes, “One researcher said that the university press office seemed to lose interest in a press release about their paper once they learned it was a null result, saying that publication could affect support for public assistance programs.” Now, in that particular case, the researcher pushed the university press and the report went out. But failing to report, or bowlderizing a report to make a program sound better than it is, is not helpful, Piper points out, if that money could be used for better programs that actually do have an impact on the lives of the poor.

Piper also rebukes the programs themselves for making their results sound better than they actually are. She points out the Denver Basic Income Project, which reported that experimental groups who received $1,000/month in payments showed “significant improvements in housing outcomes,” including fewer nights without shelter. But Piper draws back the curtain to expose this tortured twist. She writes, “I guess I can’t call this a lie per se, but in reality they gave $1,000 a month to homeless people and they were barely more likely than the control group to get housing.” [emphasis in original]. A footnote referencing this program reads: “people found housing at the same rate regardless of whether they were given $50, $1000 or $500 [per month] (plus a massive lump sum [of $6500 for those given $500/month]). Here are the actual numbers: 43% of people who received $50/month found housing by the end of the month; 44% of people who received $1,000/month found housing by the end of the month; and 48% of people who received $500/month plus a lump sum of $6,500 found housing by the end of the month. What is going on here? Unfortunately, the numbers fail to report on the quality of the housing. Did the guy who received $50/month find housing in a shelter that only allows him to stay for 30 days, while the guy who received $1,000/month actually found an apartment he is sharing with others? “Housing” can mean a lot of things. More details would have been helpful.

Piper reports that the research demonstrates that the poor are not spending the money on wasteful or what she calls “vice” spending (i.e.: drugs, alcohol, gambling, etc.). Respectfully, I have a problem accepting that homeless people did not use the money for drugs or alcohol. My experience working with the homeless and working in an in-patient psych hospital taught me that the link between drugs, alcohol, and homelessness is a very strong link. Rare is the chronic homeless person who has no relationship with drugs and alcohol.

The reality is, the $333 per month one program offered is not a lot of money. It’s not likely going to make much of an impact on a poor family’s life. Things come up. A kid gets sick and there’s an Urgent Care or even an ER visit. Some belt snaps in the car engine. There’s a school fundraiser and Momma doesn’t want her baby to feel left out. Even $1,000 a month isn’t a lot of money when it comes to caring for a family. Ask anyone whose income is less than $2,000 per month (which includes most homeless people and many families that receive SNAP – the “asset limit” for families to be eligible for SNAP in most states is $3,000). Now, if you’re bringing in $2,000/month and receive another $1,000/month, that can be very helpful. It may be enough to afford a better apartment in a better school district. But that means moving, and moving upsets family’s lives considerably. Even still, if you can get you’re kid into a better school, it’s worth it. So, why aren’t the families who received $1,000/month improving their lives, mentally, physically, emotionally, etc?

Servant of God Dorothy Day, co-founder of the Catholic Worker, who worked with and for the homeless for decades, once said, “The poor are poor in many things.” It’s not just money. It’s the ability to make that money work for your greater benefit. Perhaps for many poor families who do receive that money, the idea of moving to a better apartment in a better school district never crosses their minds. What does cross their minds, likely, is more money to pay bills, get more groceries, less stress in making the car payment or utility bill. The fact is, people who are not used to having money often don’t have the skills for using money to their greatest benefit. Someone who is homeless, give him $1,000 a month and I imagine he would have little idea of how to use that money for his greatest benefit. He’s going to try to find a roof over his head, but $1,000 a month won’t necessarily do that because it’s simply not enough. In most places, it won’t even cover rent, never mind utilities. Will he sign up for subsidized housing? Does he have any idea of how to do that? Is there anyone who will help him? How committed will he be to any program designed to help him use that money for his greatest benefit. Homeless people aren’t exactly known for having a strong work ethic or sense of commitment. He might come to one or two classes, then a better offer comes up, by which I mean hanging out with other homeless doing drugs, drinking, or just … whatever. So, he skips class and never thinks about it again. So, what’s he going to spend that money on? Probably food, or drugs, or alcohol. Maybe entertainment. And he’ll likely stay in the same housing he’s stayed in since he’s been on the streets. Shelters, friend’s places, and, of course, the streets.

Ms. Piper is shocked because, clearly, more money contributes to healthier outcomes: better mental health, better physical health, better emotional health, less stress, more happiness. What, perhaps, she doesn’t realize is that it’s not just the money. It’s knowing how to use the money. And people who have been without money, for fairly obvious reasons, don’t know how to use money for their greatest benefit. Because they’ve never had it and they’ve never known anyone who has who’s able to teach them. Nothing in Ms. Piper’s article suggests that the organizations running these cash transfer programs for the poor are dedicating any of their time to teach people how to use the money they’re receiving.

Another point Ms. Piper is missing, I think, is that people who know the money is coming in are not incentivized to find ways to use the money for their greatest benefit. They just wait for the next automatic draft to be made, and start again from the same “GO” they’ve been starting from for years. They need a new “GO” and that only comes from working for the money. People who work for their money are much more invested in their money, and have much more knowledge about how to use that money for their greatest benefit. If these programs offered classes on how best to use the money they’re receiving, and if they required even a minimal number of hours a month doing some sort of work to receive the money, it might be that better results would be seen.

But there is truly only one way out of poverty, other than winning the lottery or being an amazing entertainer or athlete and being lucky enough for someone to find you. The chances aren’t great. The way out of poverty for 99.9% of us is to learn a skill that people are willing to pay you to perform. If anybody knows another way out of poverty, I’m all ears. Perhaps the money that is invested in these programs would be better invested in programs that taught skills that people could actually work and be paid for. I honestly don’t know what else works. And those programs need to be directed at young people and men, because these are the one’s who are in need of skills. Such programs will do nothing for the chronically poor. The most you can do for them is to help make their lives less of a struggle.

My family was caught in what I call the American version of poverty. Subsidized housing, food stamps, free school lunches. We lived mostly off the money my father earned working two or three jobs and, when he died at the ripe-old age of 57, we lived off a percentage of the benefits he would have received from the work he did for the government (he was formerly in maintenance at the Pentagon) and for the benefits he earned as a veteran. It wasn’t a lot. Food stamps subsidized our food budget, and the roach infested subsidized apartments at least meant we had a roof over our heads. My mother could not work, at least full-time, in any meaningful profession. She had been a housewife for the previous sixteen years and was physically and mentally worn out. Eight pregnancies in ten years will do that to a body. After my mother died when I was seventeen-almost eighteen, I lived off a smaller percentage of the government and VA benefits my father had earned and not lived long enough to enjoy. From 18 to 25 were mostly lost years, trying to earn a degree without the proper motivation or other resources. I finally went to school and earned a bachelors in History and in Philosophy and a Master of Arts in Teaching, intenting a career teaching at the middle or high school level. I would have done better majoring in Physical Education. I learned too late that schools don’t hire social studies teachers. They hire coaches and have them teach social studies. Married by now, I went to nursing school. Why nursing? It’s intelligent work. You’re definitely making a difference in peoples’ lives. It pays fairly well, if you’re willing to work the shifts no one else wants. And you can get on a plane and fly anywhere in the country or in the world and find a job.

I have enjoyed a career in nursing for 31 years now, getting closer to 32. I have mostly worked in pediatrics. Adult nursing is not for me. If you ask me, I’ll tell you why. Now, as a dialysis patient who cannot work full-time, I do part-time work in pediatric telephone triage. People are so grateful that there’s someone who knows what he’s talking about and who’s available at 8pm or 2am.

The point of all that is to repeat what I said earlier: the only way out of poverty for 99.9% of us is to learn a skill that people are willing to pay you to perform. I did that, and it changed my life. I’ve not lived in poverty, the American version or otherwise, in decades. And, while we struggle financially now with my being on disability and working only part-time, we’re making it. My wife works full-time still. Our bills are paid and we even get the privilege of eating out every once in a while. I stay busy with the work I do for the Church as a deacon. I’m very happy, except for my health. This body is weary and worn with too many diagnoses, and other problems with no diagnosis.

I appreciate any effort to help those who are poor. The Catholic Worker strives to help people who are on the streets, and even gets a few off the streets. But any program or individual effort dedicated to making the life of the poor and homeless less of a struggle, less of a grind, is effort well invested. But to move up and out of poverty requires a skill that people are willing to pay you to perform. That’s the bottom line.

Be Christ for all. Bring Christ to all. See Christ in all.

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