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The Guardian - US
The Guardian - US
World
Rick Paulas

What do homeless people do with cash aid? A new study found out

silhouette of money exchanging hands
The results of the study also suggest that cash transfers may actually reduce government spending. Photograph: Ja’Crispy/Getty Images/iStockphoto

In 2002, the then San Francisco supervisor Gavin Newsom proposed legislation to cut welfare assistance to nearly 3,000 homeless people living in the city from $395 a month to $59 a month, and divert the budgetary savings toward shelters and other services. It was promoted with the name “Care Not Cash”.

Newsom’s campaign tied the unconditional payments to drug and alcohol abuse. As the San Francisco voter’s guide spelled out: “[H]omeless people who are addicted to drugs or alcohol end up spending their welfare checks on their addictions instead of meeting their basic needs.” The framing worked. The measure passed with nearly 60% of the vote, and Newsom used the publicity to propel his political career to San Francisco mayor and, ultimately, California governor.

Newsom’s framing was just a different iteration of an old message: it doesn’t help to give poor people money. As that thinking goes, the unhoused, Ronald Reagan’s “welfare queens” and those with substance abuse issues will just waste it.

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