A Case for Universal Basic Income: Benefits for the Homeless

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Following the distribution of stimulus checks and increased unemployment benefits from the Covid-19 lockdown era of 2020 - 2021, discussions around universal basic income was ignited in the mainstream consciousness at the time. While this discussion has since faded into the background, there continues to be firm supporters of UBI — along with firm detractors. Supporters of UBI argue that receiving a steady income flow from the government would relieve the pressures associated with long term poverty for a substantial number of americans. Detractors however, argue that UBI is an impossible to implement pipe-dream that would only lead to an economic downturn and worker shortages if it were to ever come into fruition.

While the average person may feel inclined to think about how UBI would affect them personally, discussions on the implication for the homeless population appears to be scarce. In an attempt to facilitate this discussion, I will argue in favor of UBI based on the benefits observed through a set of experiments which focused on the homeless population.

As a disclaimer, one of the key sources (Hoskins) touches upon Basic Income (BI) rather than UBI. The difference lies in the fact that BI was not applied to the entire homeless population and therefore was not entirely universal. However, BI in this case followed the same requirements as UBI: no retraction if an individual's financial and/or housing situation improved, no discrimination, and no earning threshold. Should UBI be implemented the benefits outlined within these experiments would apply. Discussion of the drawbacks with BI as opposed to UBI will be discussed further into this post.

Following the aforementioned guidelines, three different experiments took place to determine what effect BI, and theoretically UBI, would have on the homeless population. In short, results were overwhelmingly positive: recipients reported spending fewer days unhoused, spent less time in homeless shelters, and increased spending on necessities such as food and transportation and no increase on purchasing alcohol or cigarettes (Hoskins). One of these experiments reported an increase of recipients who found permanent housing — this was seen in one set of individuals receiving $1,000 monthly and another set receiving $6500 upfront and $500 per month. The aforementioned sets of individuals also saw an increase in full-time employment as well.

As explained, BI within this experiment functions similarly to UBI, with the key difference being only a select few individuals receive payments. This may be a tempting compromise for government institutions and people who would otherwise oppose UBI, but there are downsides with this approach. One key downside being that, in a scenario of bidding for housing access, individuals receiving BI may outbid those who do not receive BI (Hoskins). This simply swaps one group of unhoused people for another. Furthermore, approaching BI as access for only those who reach a financial threshold may result in an unserved demographic that's too wealthy for assistance yet barely making ends meet. Therefore, ceding the universal part of UBI may be more of a detriment than a benefit when it comes to structurally addressing poverty and in turn, preventing homelessness.

Oftentimes when arguing against UBI, detractors will cite the effect it will have on the economy as a reason to reject consideration for its implementation. But little do they realize that institutions which make more than enough money do not share these concerns and would happily risk the financial security of the average american for the sake of profit. Case in point being banks selling mortgage debts as bonds, resulting in the 2008 financial crisis. The United States government was more than willing to spend $250 billion in tax dollars bailing out the banks that threw the american economy in free-fall, but would not dare give permanent aid that would benefit the millions of americans living in poverty and the roughly 600,000 homeless americans.

The theoretical benefits UBI would provide — especially for homeless populations — should not be ruled out without further investigation. While converting UBI from theory to practice would take careful planning and rigorous testing, its preliminary results show promise in changing many lives for the better. While it's true that we may not know the broader economic implications of instating UBI until we've done so, risking the U.S. economy appears to be the norm these days (especially with the recent implementation of tariffs). With that in mind, why should we hold back the risk that our and others' lives may improve for the better?

Further Reading

UBI and how it may benefit the general population:
https://globalaffairs.org/bluemarble/multiple-countries-have-tested-universal-basic-income-and-it-works

Sources:
Hoskins, Stephen. “Basic Income for the Homeless: Findings from Three Experiments.” Progress & Poverty Institute, 2024, schalkenbach.org/basic-income-for-the-homeless-findings-from-three-experiments/.

U.S. Department of the Treasury. “Troubled Asset Relief Program (Tarp).” U.S. Department of the Treasury, 2 Nov. 2023, home.treasury.gov/data/troubled-asset-relief-program.

Investopedia Team. “What Role Did Securitization Play in the Global Financial Crisis?” Edited by Michael J. Boyle, Investopedia, 11 Oct. 2023, www.investopedia.com/ask/answers/041515/what-role-did-securitization-play-us-subprime-mortgage-crisis.asp.