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- Findings from a new study show that a basic income plan could be a simple solution for homelessness, a researcher said.
- The researchers in California gave $750 a month to people for a year — no strings attached.
- The findings show that a basic income plan is a "viable option," the study's lead researcher said.
The initial findings of a study that involved giving $750 a month to a group of homeless people in California show that a basic income plan is a "viable option" for those who have fallen on hard times, a lead researcher on the project said.
A solution, at least for "some reasonable portion of the homeless population," could be as simple as giving people in need direct cash, researcher Ben Henwood told Business Insider.
For the study, which was conducted by the San Francisco nonprofit Miracle Messages and the University of Southern California Suzanne Dworak-Peck School of Social Work, about 100 homeless people in California's Los Angeles County and San Francisco Bay Area were given $750 a month for a year — no questions asked.
In the first six months, researchers — using self-reported data from the recipients — found that those who received the influx of cash were less likely to remain unsheltered and closer to having enough money to meet all of their basic needs when compared to a control group that didn't get the funds.
"We ended up seeing the unsheltered numbers dropping pretty quickly in the experimental group that was getting the income," said Henwood, the director of the Center for Homelessness, Housing and Health Equity Research at the USC Suzanne Dworak-Peck School of Social Work.
Seventy percent of the group who got the monthly stipend came into the study sheltered, but still homeless, while the other 30% were unsheltered and living on the streets, according to Henwood.
The 30% proportion of people who reported being unsheltered at the start of the trial dipped to 12% by the six-month mark, according to the study.
Additionally, those who got the $750 stipend reported spending the majority of the money on food and housing, accounting for 36.6% and 19.5% of the spent money, respectively.
Participants said they spent another 12.7% of the funds on transportation, 11.5% on clothing, 6.2% on healthcare, and 13.6% on other expenses that were not classified, according to the study.
Henwood explained that because a portion of the homeless population suffers from mental illness or substance abuse disorders "most people just assume the idea that giving 'these people' money that it's just going to be a complete waste."
But in the case of those who were given the monthly stipend as part of the study, "in no way does it seem like they wasted their money," Henwood said.
One woman who participated in the study had still been living in her car, but reported using the cash to pay down her high credit card debt, according to Henwood.
"She had so much credit card debt that she felt that was her priority to get that paid down," said Henwood. "So for her, it was a success. She's in a much better place now than she was."
When it comes to the homeless population, Henwood said, "people often just kind of worry about" whether or not money is being spent for illicit purposes like drugs.
"Nothing in our data suggests that's a huge issue," said Henwood. "And that really people are just, you know, they have a lot of basic and individualized needs that this money is really going a long way to addressing."
According to Henwood, participants said they spent only about 2% of the total given funds on alcohol, cigarettes, or drugs — and most of that money was spent on cigarettes.
Researchers behind the study plan to publish a follow-up report next year based on the full year of data.