Whether it's large cash payments to the homeless, or a 4-day week, we're turning upside down our traditional attitudes to work

Photo by John Moeses Bauan on Unsplash Largo di Torre Argentina, Roma, Italy, 2018

The indefatigable Rutger Bregman posted on X the other day about his delight at inspiring a ground-breaking study on basic income. Details on the experiment from Vox below:

[The New Leaf study] identified 50 people in the Vancouver area who had become homeless in the past two years. In spring 2018, it gave them each one lump sum of $7,500 (in Canadian dollars). And it told them to do whatever they wanted with the cash…

Over the next year, the study followed up with the recipients periodically, asking how they were spending the money and what was happening in their lives. Because they were participating in a randomized controlled trial, their outcomes were compared to those of a control group: 65 homeless people who didn’t receive any cash.

Both cash recipients and people in the control group got access to workshops and coaching focused on developing life skills and plans.

Separately, the research team conducted a survey, asking 1,100 people to predict how recipients of an unconditional $7,500 transfer would spend the cash. They predicted that recipients would spend 81 percent more on “temptation goods” like alcohol, drugs, or tobacco if they were homeless than if they were not.

The results proved that prediction wrong. The recipients of the cash transfers did not increase spending on drugs, tobacco, and alcohol, but did increase spending on food, clothes, and rent, according to self-reports. What’s more, they moved into stable housing faster and saved enough money to maintain financial security over the year of follow-up.

“Counter to really harmful stereotypes, we saw that people made wise financial choices,” Claire Williams, the CEO of Foundations for Social Change, told me.

The study, though small, offers a counter to the myths that people who become poor get that way because they’re bad at rational decision-making and self-control, and are thus intrinsically to blame for their situation.

[The other myth] is that people getting free money will blow it on frivolous things or addictive substances. Studies have consistently shown that cash transfers don’t increase the consumption of “temptation goods”; they either decrease it or have no effect on it.

“I have been working with people experiencing homelessness as a family physician for years and I am in no way surprised that the people who received this cash used it wisely,” Gary Bloch, a Canadian doctor who prescribes money to low-income patients, told me.

“It should be fairly self-evident by now that providing cash to people who are very low-income will have a positive effect,” he added. “We have seen that in other work (conditional cash transfer programs in Latin America, guaranteed annual income studies in Manitoba), and I would expect a similar outcome here.”

What’s more, according to Foundations for Social Change, giving out the cash transfers in the Vancouver area actually saved the broader society money.

Enabling 50 people to move into housing faster saved the shelter system $8,277 per person over the year, for a total savings of $413,850. That’s more than the value of the cash transfers, which means the transfers pay for themselves.

The research team also looked at what’s effective at changing the public perception about cash transfers to homeless people. They found that pointing out how cash transfers actually produce net savings for society, as well as showing how homeless people spend the money, are both effective ways to counter stereotypes among the public.

“People think that the status quo is cheap, but it’s actually incredibly expensive,” Williams said. “So why don’t we just give people the cash they need to transform their lives?”

More here from Vox. It’s been a significant seven days for advancing the agenda of reducing the hours we spend on standard work (or looking for it). See this National piece on the Scottish Government experimenting with a four-day week for their civil servants next year, from our co-initiator at AG, Pat Kane.