Can “Handouts” Lead to Self-Sufficiency?

New programs are challenging stereotypes about poverty.

In the United States, we shun the idea of handouts. We believe in theAmerican dream: that hard work will bring prosperity. So, when we provide help to our poor and needy, it often comes with conditions. Voucher programs like food stamps and childcare subsidies provide support only for approved items. We require welfare participants to attend vocational training programs in order to earn their keep. In some states, a debate rages on whether to drug test these participants. These programs rely on a notion that the poor are poor for a reason: that they make bad decisions, have the wrong priorities, or are simply lazy. But a new model of programs that provide no-strings-attached aid to those in need is challenging these stereotypes.

No strings attached.
Voucher programs assume those in poverty won’t spend money appropriately if left to their own devices. These programs reinforce a paternalistic mindset that the wealthy know what is best for the needy. That’s often not the case.

Unconditional cash transfers have gained popularity in recent years, especially in developing countries. A 2013 Policy Brief from MIT describes the findings of a randomized, controlled study examining the impact of unconditional cash transfers in Western Kenya. The study found that the unconditional transfers reduced hunger, increased consumption, improved psychological well-being, and allowed impoverished households to build assets. The transfers did not lead to increased alcohol or tobacco spending. A similar program in Brazil, which provides transfers to mothers with only one condition (that children attend school) has led to decreased infant mortality and improved educational outcomes.

These programs can work in the United States, too. In 1996, the Eastern Band of Cherokee Indians opened a casino and elected to distribute a proportion of profits equally among its members (creating an unconditional-transfer scenario). Aresearcher followed children in the area and found that the casino profits helped move families out of poverty and led to improved mental health and better parenting. More recently, Utah adopted a Housing First program to provide no-strings-attached housing to the homeless, reducing homelessness by 74 percent. Providing apartments reduced the amount of money the state spent on medical and other costs for homeless citizens, resulting in net savings.

Earning their keep.
Despite evidence in favor of no-strings-attached aid, it’s still a struggle for many to overcome the notion that people need to “earn their keep.” If we don’t require people to work for their welfare, aren’t we fostering a culture of helplessness and dependance? Not necessarily.

Maslow’s hierarchy of needs

The vast majority of people want to be self-sufficient. They desire independence and financial stability. They want to work and support their families. But there are a myriad of factors that get in the way. Maslow’s hierarchy of needs theory suggests that an individual’s basic physiological and safety needs must be met before they can progress to other needs. For impoverished and homeless individuals, the basic physiological needs and safety needs are not met. How can we expect someone to prioritize showing up to work on time or getting homework done when they are constantly worried about their next meal or where they will sleep at night? Unconditional assistance helps individuals fulfill these basic needs, so that they can move on to focusing on their work, education, and family relationships.

To condition or not to condition?
The evidence weighing the effectiveness of unconditional cash transfers vs. conditional cash transfers is mixed, and there are arguments to be made in support of both types of programs. Ultimately, providing resources to families in need leads to improved outcomes, whether the resources come with conditions or not. The proven effectiveness of unconditional cash transfer programs serves to discredit stereotypes of poor people as ignorant, lazy, and bad at making decisions; when given cash, they spend it intelligently and alleviate many negative impacts of poverty. Trusting individuals to help themselves can save taxpayer money spent on monitoring and implementing conditions associated with many modern social assistance programs, freeing up funds to go directly to those in need.

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