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When 13 homeless people were given free money...


Whilst it may seem like clickbait, 13 homeless people were indeed given ‘free money’ in an experiment aimed to lift them from the streets. It’s often believed that the causes of poverty and homelessness are laziness, lack of money skills, no ambition or even intelligence level and that eradicating poverty is just too expensive. It was former British Prime Minister Margaret Thatcher that was once quoted saying poverty is a ‘personality defect’. However, what if the cause of poverty was simply a lack of money and that giving out ‘free money’ is the best and cheapest solution we have?


THE IDEA


The experiment was modelled on the idea of ‘Universal Basic Income’ (UBI). Historian Rutger Bregman describes the idea in simple terms as ‘free money for everyone’. It’s an amount of money, given monthly, to cover basic needs like food, shelter, and health. It’s universal, unconditional and ‘a right’, so the complete opposite of the welfare state. Studies have shown that UBI lowers poverty and crime rates, whilst improving health, education levels, and even economic growth.


THE EXPERIEMENT


The year is 2009 in Central London and 13 homeless people have been given a ‘no-strings-attached’ sum of money in a move to empower them to leave the streets for good. It was estimated that these 13 individuals had cost the state £400,000 in legal, health and policing costs. This experiment may, therefore, not just lift people from poverty but also save money too. They were given £3000 each, no-strings-attached, to spend how they desired. They could also request to have access to help from social workers for housing and health advise, and a financial advisor too. The only question they had to answer was: ‘what is good for you?’.


THE RESULTS


The results were astounding. Overall, the individuals showed to be very frugal with their money, spending just an average of £800 each in the first year. A passport, a dictionary, clothes, a hearing aid, and a chair were just some of the items bought with this money. Even better was that 7 of the 13 had accommodation with a further two more submitting their applications. Some took up gardening and cooking classes, some saw their families again and some saw it as a great opportunity to successfully go through rehab. It seemed that the cash had ‘empowered them’. One of the participants named Simon, who had been a heroin addict for 20 years, said ‘for some reason, for the first time in my life, everything just clicked’. He later added ‘I’m starting to look after myself… now I’m thinking of going back home. I’ve got two kids’.


However, how much did all this cost in total? The total cost of the experiment was just £50,000 including social worker wages, a significant financial saving. Not only did this experiment empower them to believe they can truly move off the streets, but it also saved money in the process.


In response to these findings, The Economist newspaper wrote ‘the most efficient way to spend money on the homeless might be to give it to them’. Rather than monitoring and setting limits, we could offer responsibility and trust them with how best to spend their personal budget.



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