Researchers Gave $750 Monthly to 100 Homeless People in California: Here's How They Spent It

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Recently, the concept of Universal Basic Income (UBI) has gained traction as a potential solution to various social and economic challenges.

A fascinating study in California provides compelling evidence supporting this idea. This study focused on homeless individuals in Los Angeles County and the San Francisco Bay Area, who received a monthly salary of $750 for a year, with no strings attached. The outcomes of this experiment offer valuable insights into the effectiveness of UBI.

The Study and Its Findings

The study, a collaborative effort by Miracle Messages and the University of Southern California Suzanne Dworak-Peck School of Social Work, involved about 100 homeless people. These individuals received $750 each month for a year. The results from the first six months of this study are particularly enlightening.

Spending Patterns

A significant finding was how the recipients utilized the funds. Contrary to common misconceptions about financial irresponsibility among the homeless, the majority of the money was spent on essential needs. The breakdown of expenditures was as follows:

• Food: 36.6%
• Housing: Nearly 20%
• Transportation: 12.7%
• Clothing: 11.5%
• Healthcare: 6.2%
• Other Expenses: 13.6%

Only about 2% of the funds were used for alcohol, cigarettes, or drugs, with cigarettes being the primary expense in this category. This spending pattern dispels the myth that financial aid to the homeless would be largely misused.

Improved Living Conditions

One of the most heartening outcomes was the reduction in homelessness among the participants. The study reported a decrease in the number of people who were unsheltered, dropping from 30% at the beginning of the trial to less than 12% after six months. This contrasted with a slight decrease in the control group, from 28% to 23%.

The California study is not an isolated case. Similar experiments in Durham, Denver, and Stockton have shown positive results. These programs have led to increased employment and housing stability.

The results from these initiatives in California and other places paint a promising picture of UBI as a tool for social improvement. Providing direct financial assistance empowers individuals to address their immediate needs, leading to better outcomes in housing, health, and overall well-being.

Sources:

Miracle Money_Nov 2023_draft (usc.edu)

$750 a month was given to homeless people in California.