> I cannot stress how shocking I find this and I want to be clear that this is not “we got some weak counterevidence.”
I don't think this is surprising when considering personal experience with people, at least not for me.
I know people with various degrees of success in their lives. For instance, you meet someone who is chronically broke. At first, you empathize and see them as more or less a victim of misfortune. Unseen car repair bills, job losses, etc. But if its someone you follow over years and get to know, you begin to realize a lot of their problems are self inflicted. For instance, they may get a new job with a big pay raise. But they just adjust their spending up. Some windfall that could turn things around becomes a vacation. And so on.
The same is true with other personal problems. Like the perpetually single person, who upon further examination, doesn't do anything to help their chances. Or the overweight person with a thyroid problem, that really just over indulges.
Helping people we're close to and love is hard enough. I can't imagine just solving some strangers problems by writing them a check
If you simply gave young people $100k - which is a number nobody is seriously throwing around - what do you think they would materially gain from it? Very little. Their ability to purchase a home is still income-based and far more than a $100k windfall in many parts of the US can sustain for much time at all and everything else is just a slow bleed.
Little? It would remove most of the obstacles in their life: Move away from shitty parents or neighborhoods. Allow Finish their studies without having to hold a job at the same time. Allow a decent job search. Rent near work. Become the foundation for long term investing. Have a decent minimal-breakdowns car if useful where they live/work. Have a safety reserve in case shit happens. After a little time building a credit record, become the down payment for their home (if that's worthwhile on their trajectory), etc, etc.
I would argue though that $100k may not by itself achieve much if - in general - lack of good example, lack of good counsel, presence of terrible "friends", mental illness, etc.
In spite of some views on HN, "normal job" is still the way to a comfortable life for most.
Another trait about money that I inherited is all generations in my family since and including my grandparents never had any debt. Being in debt even just for a short period would totally stress me out. I only ever buy what I can afford to without credit.
$100K at age 20 can become $1.6M by age 60, per the rule of 72, if invested in a diversified stock index with 7% total return. At age 60, the 4% safe-withdrawal rule says that $1.6M might provide $64K/year indefinitely.
So, they could gain a hell of a lot from $100K when young. The trick is saving/investing/time.
I also still don’t think this helps most people during the bulk of their lives. Most people in this cohort don’t save now, having knowledge of a more secure retirement wouldn’t change much for them. It’s not like they can turn off 401k contributions and have extra pocket money today.
Read and internalize https://www.bogleheads.org/wiki/Prioritizing_investments. It is simple. It is immensely useful.
Think of it another way, I hear that big cash expenses can destroy wealth. For instance, if you have no cash reserves, that means you may rely on pay day lenders. You can't afford a Costco membership. You don't have a car so you're limited on where you can work and shop. You cannot afford some vocational training or some time off to train. There are a lot of things that can save or make you money long term.
Also 100k invested in the market will yield you probably around 7k, which is a lot, especially you don't touch it and let it compound.
100k invested in the market - untouched - will decay a certain percentage a year in purchasing power due to inflation but will outpace it due to returns.
How many years until that cash windfall changes your life?
The answer is "indefinite" years, especially if you're actually using the funds to do anything, i.e. withdrawing them and preventing compound interest.
In 20 years you might be able to get into a home with the cash if you've absolutely touched not even a penny of it but A. you likely haven't and B. you probably still can't get into a home, 20 years later.
Of course, the number is fake, nobody is handing out 100k.
Lotteries are, there are studies on those.
What's your point? That inflation is a thing? The S&P 500 has delivered an average annual return of 10.33% since 1957, but when adjusted for inflation, the real return drops to 6.47%.
> In 20 years you might be able to get into a home with the cash
Why are you hung up on owning a home? There are 100 other things you could do w/ a windfall with a better return than buying a home. Invest in education is probably one of the more high return things you can do w/ a windfall
https://www.investopedia.com/ask/answers/042415/what-average...
Yes, but that's facile.
Do they, commonly? No.
> Also 100k invested in the market will yield you probably around 7k, which is a lot, especially you don't touch it and let it compound.
You came so close to getting the point, and then kept walking with your own predetermined idea! "Why don't these single-income, struggling mothers and unemployed homeless people just take this cash and invest it?" is the most privilege-laden, oblivious idea I've heard in a while.
Just based on what I'm reading it's very likely that your idea of how people are railed or de-railed from life success might not comport entirely with reality, i.e. there aren't really small financial problems that people ride the razor's edge to insolvency.
My understanding of financial problems is that they can only be resolved through huge cash infusions (likely about enough to buy a home outright) or through long-term cash infusions (i.e. a guaranteed well-paying job).
We don't have any mechanisms to provide these things to people, the costs of living are too extreme. I can't suggest anything better, I'm just pointing out the issue.
AND, they are enabled and pushed into this mentality by other, also-not-very-financially-savvy people in their lives. When that once in a lifetime $1,000 windfall comes in, everyone around them tells them "Come on, blow it on a vacation! You shouldn't deny yourself a little luxury if it makes you feel good! You can't just eat ramen every day, here's your chance to live a little!" and suddenly they're back where they started, pre-windfall.
It's just a placeholder for wharever number makes sense in the clearly expressed context. Either substitute $5000 or $10000, or substitute whatever location or demographic you imagined (since none was specified) for some other location or demographic. You can't start in the US and vacation in Venice for $1000, but you absolutely can vacation somewhere else and/or somehow else.
Or, just pretend they said whatever other number you like, because the specific amount was not material to the point they were expressing.
And that included zero activities
Anecdotes are fun!
Then they pointed out that both your data point and theirs were anecdotes (I guess that's what a single data point is), rather than actual data.
So their point was that they have experience that contradicts yours, and that neither their experience nor yours does anything to advance the conversation, because they're both just anecdotes.
As I said, I thought that was very obvious from their post.
So, we're back at Jensson's post from a day ago, with both you and IAmBroom having supplied contradictory anecdotes, and neither having supplied any data. So, do you want to add some data?
Victims absolutely exist, but the best working assumption is that someone has the results they have due to personal decisions. And this equally applies to yourself. If you feel something is wrong or missing in your life, it's best to assume its based on decisions that you made.
The inheritance we (don’t) get is not just monetary, it is attitude, culture, expectations, education, network, class privilege, race privilege, and a host of other things that make it difficult to act “rationally”, or which change the parameters of what is rational for each individual.
Lack of money never helps, but it’s rarely the only problem.
It is 100% not true for others. My neighbors know every damn trick in the book for welfare; it's a part of their budget. More money removes serious obstacles in their days.
Awesome.
It's also true the other way: you have to pay rent (poor pays rich) or else their thugs come and beat you up.
Pretty much everyone wants your money or they'll do what you can to make your life worse. You'll also do what you can to make other people's life worse if they don't give you enough money, like not working for them.
Correct me if wrong.
I’m as free-market-laissez-faire as they come, but without guard rails, taking it to its logical conclusion then there should only be a single person in the world holding all the money!!
She also fails to mention that the Baby's First Year study was unfortunately overlapped by the Covid epidemic, introducing an enormous confounding factor (made all the more significant since the study measured child welfare), not to mention the Covid payments that likely dwarfed the $333/mo study payments and would have been received by both control and test subjects.
https://www.denverbasicincomeproject.org/research
https://newrepublic.com/article/199070/government-cash-payme...
This is a brand new publication and I really wish they skipped her, made the whole endeavour seem unserious and extremely online to me (which it is! but I wouldn't have noticed. so I guess I'm grateful?)
It also made me appreciate how little editorial there is left, so many publications, especially online, are stripped down to the point its freelance bloggers that kinda stay the same no matter what, rather than people growing as writers.
My two most scarring facepalms in recent memory:
- [my home] Oakland is safe, the Feds coming in isn't needed, But..............the real problem of them being here would be Duh Dems complaining, people know crime is real and bad and hate being lied to.
- It'd be bad if we deported people for their views but then again we don't know what we don't know about the level of terrorist support provided by these people who complain about Gaza.
I think its clear UBI is not the savior people wish it was, sadly.
As a basic example: While your point about the starting percentages is correct, the study lost partipicants over time. Group A (the 1k/month group) lost 33% of its participants by T3, and Group C (the 50/month comparison group) lost 38% of its participants.
The table you quote from the final study doesn't include the people who were lost, only those who filled out both surveys, T1 and T3. So using it to say they helped a greater percent of people is a bit weird.
They also don't tell you the table for T2 in the final report, you have to go look at the interim one.
The T2 data makes T1->T3 look much less impressive, and definitely doesn't seem to support some amazing gain for group 1.
As far as i can tell, the data looks even less impressive for your claim if you do t1->t2, and T2->t3, instead of just t1->t3 with only both included.
It would certainly be easier to tease apart the point you try to make if they reported the number of originally unhoused vs originally housed that were retained at each timepoint, but they don't.
So what am i missing? Why should I look at these results and think it is amazing?
(Also, I don't think i'd agree the main argument the author makes is based and refuted solely by the results of the denver study)
Maybe you're looking more at the article headline, which implies the author was focused on the study results. The thrust of the article isn't that the programs are ineffective (in fact, toward the end of the article she's quite optimistic that isn't the case). Her problem is that the results are overstated. But one of the prime examples she cites to support that idea does not actually support it. Denver claimed significance, and the study results support their claim.
>The table you quote from the final study doesn't include the people who were lost, only those who filled out both surveys, T1 and T3. So using it to say they helped a greater percent of people is a bit weird.
Why is that weird? The percentage of the test group who found housing is significantly higher than control. We don't know what happened to the people who dropped out---the worst case scenario is that none of them found housing, which leaves the stats as they are.
>So what am i missing? Why should I look at these results and think it is amazing?
They didn't claim it was amazing, they claimed it was significant. The author implied they were lying. They were not. That's what you're missing.
Thats the point of the author, those are minimal variances, and insuficient to claim inpact due to basic income.
Personal opinion. The study itself exert a nontrivial influence on participants. The act of being engaged, regular check-ins... affect positively. Their lives improve independent of the financial component because they are part of the study, not because of the amount of money in the procedure.
Giving individuals money without changing the policy context doesn't actually test the mechanism of action proposed for UBI. (It does, arguably, test the mechanism of action of some proposed private charity [or business-linked] alternatives which do involve cash transfers and don't involve changing the public policy context and incentives, but that's a whole different issue.)
Others were making more on unemployment than they did while employed. They got checks on a regular basis that meaningfully increased their income level. I’m not surprised or offended if they try to temporarily increase their standard of living in frivolous ways.
But your one unsubstantiated story doesn’t constitute data that can be used to compare to anything.
Other people had the same idea as me. With data! PPP loans taken out during Covid to thousands and thousands of one-person companies and eventually forgiven by the Biden administration.
To make another point, why didn't we see a surge in art and positive improvements when someone gets free money from the government? Because what happened is what always happens: It was wasted.
Some NGOs that help unhoused people did shift to direct cash transfers because 1) they still help improve material conditions (even the author agrees with this), and 2) it’s politically easier than trying to convince locals to actually build affordable housing.
Of course a holistic approach is probably going to improve conditions better, but no one with actual political power is interested in doing that.
> What’s the smallest amount of money that you would consider “life-changing”? Some might say $100,000. Others over $1 million. If you had asked me this question a few years ago, I would have told you something similar.
> But today, I’m convinced that the most life-changing amount of money is $10,000—in particular, the first $10,000.
[…]
> Why? Because getting out of Level 1 fundamentally changes how you experience life. You go from focusing on your next paycheck and dreading your next bill to enjoying your time without worry. Getting out of Level 1 frees your mind so that you can focus on other things. That first $10,000 can bring: Stability […]; Confidence […]; Momentum […]; Mental freedom.
* https://ofdollarsanddata.com/the-first-10000-is-the-most-imp...
* https://ofdollarsanddata.com/the-wealth-ladder/
The research he cites finds that happiness starts levelling out at Levels 3-4 of his framework. Some of his posts on the subject:
I wonder why they chose to unflag this and not, for instance, “Brennan Center for Justice Report: The Campaign to Undermine the Next Election,” which is far better journalism and had a lot more discussion: https://news.ycombinator.com/item?id=44816165
They say they don’t make moderation decisions for political reasons, but I am finding it harder and harder to see.
Going from 0-$1k/mo or $1K to $2k/mo means you're still broke.
You can definitely afford some food or necessities that were harder before, but fundamentally, you still need to hustle to change the fundamental financial situation.
I started in pretty much the same circumstances as most of my peer group, with one distinct difference, my dad had gone to school for business and accounting and was a bit miserly, he instilled in my an understanding of the value of a dollar and the right skillset to track where my money is going. That small little difference is what separates the fact I will end up dying a multi-millionaire and my peer group are mostly going to end up dying broke. Obviously there's hundreds of thousands of little choices we make every day of our lives that nudge things in one direction or another for your financial trajectory, but starting with a grounding in financial literacy is literally life-changing.
It's not cash that people need, it's education, so that they can actually effectively use the money they already earn. I started saving from my very first job as a teenager, and have never stopped. The median American net worth excluding home equity is negative, mine has never been negative at any point in my entire life, from before I was an adult, despite growing up low-income in a rough area.
Like, the whole point of a 'study' is to test things out. That's temporary by design.
But yes, it's a giant confound too.
I guess what the DBIS showed is that the results are not spectacular and automatic. They are slight-ish, grey, muddled.
Like, if UBI was a panacea like insulin was to diabetics, then we'd expect a huge result and difference. But it wasn't, and that a good result to report out too. I just wish there was a silver bullet.
But these studies aren't like that. They aren't that good. UBI isn't that good. That's what I get out of these studies.
A better UBI study would bucket people into a lifetime monthly payout (with inflation increase etc). Give them an opportunity to invest in their lives.
I wonder about the possibility of a graduated financial literacy scale for participants that studies can use.
For example, I have too many connections to the financially struggling to not ask for the receipts when they complain to me. Well, they demur, the cost of living is expensive. Okay, but can I see your spending? Typically never, but when I do, it's bad loans, unrestrained taxis-for-your-burritos and impulse purchases that fritter their income away $5-50 at a time indefinitely. There is no saving. There is no wealth. Only impulsivity. Nor is there change or recognition. New or bigger income sources only change one variable of their equation while their spending behaviors are fixed, and the outcomes are the same.
Money is a metric. Life is qualitative, with quantitative pieces.
If giving someone a 66% or more bump in income doesn't change their situation, they didn't have money problems to begin with.