One huge policy idea that has been gaining more traction is the idea of a universal basic income (UBI), which would be guarantee a basic stipend to pretty much everybody to do with as they will. It's a huge subject and I won't go into all the pros and cons but would like to share a news story that might shed light on what effect something like that could have.
According to this CNN report, researchers in Vancouver gave a sizeable amount of money in a study appropriately called "New Leaf." It went like this:
"Researchers gave 50 recently homeless people a lump sum of 7,500 Canadian dollars (nearly $5,700). They followed the cash recipients' life over 12-18 months and compared their outcomes to that of a control group who didn't receive the payment."
The researchers report these preliminary findings: contrary to what stereotypes people may have about homeless people and their possible spending habits, those who received the lump sum:
● Move into stable housing faster
● Spend fewer days homeless
● Retain over $1,000 in savings through 12 months
● Increase spending on food, clothing, and rent
● Achieve greater food security
● Made wise financial choices with a 39% reduction in spending on alcohol, cigarettes and drugs
● Reduce reliance on the shelter system of care, resulting in cost savings to society
Most recipients knew right away what they wanted to do with the money. On top of all the other benefits, this program saved around $405K in shelter costs. Since homelessness is increasing in the wake of COVID, innovative approaches like these are worth considering.