
What happens when you give homeless people a prepaid credit card.  - pavs
http://www.thestar.com/news/gta/article/854018--how-panhandlers-use-free-credit-cards?bn=1
======
jacquesm
Being homeless in Canada is 'something else'. You don't really realize how
harsh those winters are until you're in Toronto and you see the streetpeople
after a night at -30 Celsius.

I've lived on King street, where it ends on the lake, and from there it was
about a 20 minute walk to the office. Every day I'd walk that same route and
meet probably between 5 and 10 people living 'off the street'. They'd all be
equally friendly. They had their own spots.

The police in Toronto was pretty laid back at the time (I'm no longer there so
I have no idea how they are today), when a really cold night would approach
they'd round up the homeless people and bring them to a shelter. But every
year, in the spring one or two bodies would be found in the melting snowbanks.
The unlucky ones that avoided the shelters and slept in 'their' spots only to
never wake up again.

Winter in Canada is harsh.

~~~
dschobel
Ditto Chicago. The fact that every homeless person in the country does not
save up the $50-$100 (less than a week's work in a major city) in bus fare and
make a beeline for Miami or San Francisco has some scary implications about
the depths of the problem and/or their ability to make some simple
improvements in their situation.

~~~
thaumaturgy
> _...or their ability to make some simple improvements in their situation._

I think it's almost impossible to understand if you've never been completely
destitute, but, ironically, for most people as their situation worsens their
ability to cope becomes overwhelmed and their ability to make rational
decisions disappears.

This is probably the number one problem of poverty, and it applies to the poor
and homeless in developed countries, as well as to the populations of
completely broken nations. For example, as they become poorer and poorer, many
people become more and more irrationally attached to their "stuff" and refuse
to part with it, even if leaving it behind and moving on would dramatically
improve their situation. They become extremely reluctant to try anything new.
I think their psychology is such that they've been overwhelmed by the failures
of everything they have tried, and they don't feel like they can handle a
whole new failure; they seem more comfortable repeating the same mistakes over
and over again. Malnutrition and stress also do a really nice job of
exacerbating any latent mental issues they have, and those won't go away after
a year of comfort, which frustrates those people that would try to help them.

So, I don't know what the answer to all that is, but I am convinced that the
earlier it is addressed, the better, and that it's unreasonable to expect most
people to resolve their own situation.

~~~
wallflower
Old but good HN discussion on homelessness

<http://news.ycombinator.com/item?id=116079>

> 2) The existence of the minimum wage hurts the homeless. The people I worked
> with were incapable of producing $6 an hour of value for an employer. If
> there was no minimum wage, they could work $2 an hour of value and then
> gradually work their way up.

~~~
jacquesm
It wouldn't work though. Employers would take advantage of the situation,
market rates would drop to the point where the homeless person would no longer
be able to create $2 of value per hour either...

~~~
grandalf
Minimum wage just outlaws all jobs that are worth less than $6 per hour.
Suppose the unemployment rate is 5%, if minimum wage were raised, unemployment
would increase. If it were lowered, unemployment would decrease.

There is a widespread misperception that businesses naively overpay employees
for work that is actually worth less than minimum wage. This is not the case,
which is why there is litter on sidewalks and beaches (for example) and why
there has been a rise in the use of robotics (mechanical car washes, street
sweepers, assembly line robots, grain harvesters, etc.)

Maybe in the short term some workers were overpaid, but it is generally very
brief and does nothing to equip those overpaid workers for the future since
industry is striving to correct the inefficiency and develop a robot, etc.

I think the point you are missing is that it's not just about the wage someone
is paid, it's also about the training the job provides. Minimum wage prevents
people unable to add $6/hour of value from having a job at all, which makes
them helpless wards of the state. Great accomplishment.

~~~
thaumaturgy
> _...if minimum wage were raised, unemployment would increase. If it were
> lowered, unemployment would decrease._

And yet, there are so many stories from wait staff about how important tips
are to their ability to survive. Lowering unemployment at the expense of a
much larger group's ability to survive is not a good idea IMO.

------
TallGuyShort
An intresting idea. For those that would like to be charitable to the homeless
but are concerned about how it gets spent, we've started carrying a few $10
gift cards to McDonalds (or something similar). That way we know it gets spent
on a relatively decent meal, and not booze. Recently we've seen more homeless
families with kids - and it's especially nice to be able to give them a few of
those.

edit: An added benefit during the winter, is that they get to be a 'paying
customer' somewhere warm for at least a couple of hours.

~~~
duairc
I get the idea, and that's kinda nice, but I would see it as a bit unfortunate
that McDonald's get your money and that they get to eat McDonald's food (as
opposed to something healthier and subjectively more ethical).

I do a bit of dumpster diving and otherwise collecting food that would
otherwise go to waste (there are a few restaurants near where I live that will
happily give you their leftovers if you go them at closing time). If I ever
see a homeless person I always offer them the food that I have.

~~~
stan_rogers
Believe it or not, to somebody who hasn't had a whole lot to eat in the recent
past, everything that one would normally hold against a McDonald's meal
becomes a big advantage. That high-fat, protein-heavy, "empty carbs" meal, the
one _you_ probably shouldn't have for lunch every day, is pretty much exactly
what a homeless fellow ought to be eating in the winter. Sure, it'd be nice if
he could get a veg or two to go along with it, but there's a requirement for
concentrated calories you probably wouldn't understand.

(I've been homeless in Toronto, back in the mid-'90s. Big recession. Some of
you may remember it. It took eight weeks to get a gig shining shoes, and even
then I was among the working homeless until I'd saved enough to pay rent up
front on a room you probably wouldn't think of living in. And no, eliminating
the minimum wage wouldn't have helped -- I would never have been able to
afford to move indoors. I do wish I could figure out where these amateur
economists get their ridiculous ideas. I'm sure it looks good on paper, if you
eliminate things like, oh, the cost of food and shelter from the equation.
Remember, the solution should be as simple as possible, but _no simpler_.)

~~~
duairc
I pretty much agree with everything you've said, except that "everything one
would normally hold against a McDonald's meal" includes much more than its
nutritional properties.

------
GiraffeNecktie
A good portion of the problem of homelessness could be addressed by a sane
approach to substance abuse. One innovation is a special 'drug court'. If a
person charged with an offense has a drug problem, they have the option of
entering a rigorous rehabilitation program with intensive support and somewhat
intrusive monitoring. The upfront costs are a little higher (than standard
courts) but data indicates that it really pays off in the long run.

And related to that, it would be really helpful if drugs were treated as a
mental and social health issue and not as a law enforcement problem.

~~~
duairc
A better approach would be destroying capitalism.

Edit: Sorry, I do more or less agree with you that what you are describing is
pretty much the right way to handle drug problems, but I think it's important
to point out that poverty and homelessness are symptoms of capitalism, which
is the real problem.

~~~
tommynazareth
Wow, I'm really surprised to find someone on HN who is against capitalism.
Here are a few points for you to consider, they might help you clarify your
position on capitalism:

1\. What you are probably really against is collusion between big government
and big business. This is a real problem and is antithetical to true
capitalism.

2\. In a free market economy, there is plenty of room for charity and there is
no one stopping people from organizing and participating in communes.

3\. Taking my money through force to redistribute through inefficient state
run welfare programs is not going to benefit anyone but the government. The
poor will continue to be poor, and the elite will continue to extort those who
actually add value.

~~~
jacquesm
He's right though, in the communist countries that I've visited there was
nobody homeless.

I am surprised that on HN someone that states something that contributes to
the discussion gets modded to -4, I thought we reserved that for trolls.

You can find plenty of things wrong with communism, and I think that for the
most part capitalism is to be preferred but that doesn't make him factually
wrong.

~~~
dschobel
I imagine the reason he got modded to oblivion was that he made an
extraordinary claim _"...I think it's important to point out that poverty and
homelessness are symptoms of capitalism, which is the real problem"_ with no
attempt at justification.

Besides which, capitalism is not a form of government. So he started from a
position of error and then went out on his limb from there.

~~~
duairc
It was an extraordinary claim (given the demographic here) and I made no
attempt to justify it, so I can see why it was modded so harshly. I think the
modding was a bit extreme, but I knew when I was making the post that it was
going to be a -4 type of thing.

However, I don't think question of whether or not capitalism is a form of
government has anything to do with the point I was making.

~~~
gloob
Meant to upvote you and fat-fingered it, sorry.

------
cperciva
Stories like this make me wish that it was easier for homeless people to be
declared mentally ill and placed into mental health facilities. (Damn you,
deinstitutionalization.)

There are some people who are homeless because they're poor, but in the vast
majority of cases it seems that the primary problem has nothing to do with not
having a home.

~~~
jacquesm
> Stories like this make me wish that it was easier for homeless people to be
> declared mentally ill and placed into mental health facilities. (Damn you,
> deinstitutionalization.)

It's actually good that it is not so easy to declare people mentally ill,
especially when they're not. Canada has a history of having it's 'social
services' go completely out of control when given too much power, one nice
example is the service that ostensibly protects children from abuse.

(But in fact is just as likely to do great damage to both children and their
families).

I think many people would like to institutionalize the homeless just so the
'problem would go away', but homeless people are a symptom of a society that
has issues, not just of those people.

For instance, banks and lawyers contribute to the number of homeless people by
making it too easy to declare people bankrupt, seizing their possessions and
means of generating income or their house, or to destroy someones life in
divorce proceedings.

And then there are those that simply don't want to be part of the 'rat race'
that have no other option but to become homeless (the Roma in Europe for
instance). That used to be 'ok', but these days everything has to be owned by
somebody so there is no way to be out of it all without trespassing.

It's not all clear cut. For sure there are mentally ill people that are
homeless but I'd be highly surprised if that was the majority. For the most
part they're just ordinary people down on their luck abandoned by friends and
family. And plenty of them hit the bottle or drugs after becoming homeless,
not before.

~~~
cperciva
_I think many people would like to institutionalize the homeless_

I absolutely do not want to institutionalize the homeless. I want to
institutionalize the mentally ill.

 _For sure there are mentally ill people that are homeless but I'd be highly
surprised if that was the majority. For the most part they're just ordinary
people down on their luck abandoned by friends and family_

You're right that the vast majority of people who become homeless are not
mentally ill. However, the vast majority of people who _stay_ homeless are
mentally ill.

~~~
mattchew
> I want to institutionalize the mentally ill.

Institutionalize is a nice, clinical sounding word, but what it means is
incarcerate. Imprison.

You are talking about locking up people without them committing any crime,
without any trial, without them having any appeal or defense, for a week, or a
year, or their entire life.

You, I suspect, would condemn a police authority who wanted to imprison
whoever it liked, for however long it liked, on grounds of serving the general
good. It is just as wrong to give a medical authority those powers and declare
they'll only be used to help the people they're imprisoning.

~~~
cperciva
_You are talking about locking up people without them committing any crime,
without any trial, without them having any appeal or defense, for a week, or a
year, or their entire life._

Not at all. In Canada, at least, people in psychiatric institutions have ample
opportunity to challenge their detention. Their cases are reviewed and they
are considered for release far more often than those who are convicted of
crimes are.

~~~
mattchew
In the bad old days in the U.S., crazy people, or people deemed crazy, could
be kept in a mental institution against their will for years and years. When I
hear people decrying deinstitutionalization, I assume they want to return to
those bad old days.

I don't know about Canada, past or present.

------
ars
LCBO is the Liquor Control Board of Ontario.

~~~
jacquesm
The Canadian government has all kinds of monopolies, the LCBO is just one of
several. You can really see how Canada has its roots in The Hudson Bay Company
when you study how that came to be.

In case you're interested:

<http://en.wikipedia.org/wiki/Hudson%27s_Bay_Company>

~~~
philwelch
In the US, we have state monopoly liquor stores as well. They were instituted
as part of the regulation scheme when alcohol was legalized at the end of
Prohibition. They continue on as major revenue generators for the states. Many
states don't have them, but many do as well.

Ontario is one of the Canadian provinces which implemented Prohibition as
well: <http://en.wikipedia.org/wiki/Prohibition_in_Canada>

~~~
steveklabnik
It's really interesting how disconcerting this is. I live in Pennsylvania,
which has the same state store concept. I've lived here all my life. I don't
travel much, and so the once a year or so that I leave the state, I have a
roughly five second period when I walk into a 7-11 and they have beer in the
cooler.

------
grandalf
As an American who has visited Canada many times, I've always been struck by
the high functioning of Canada's homeless population. There are a lot of
homeless youth and young adults who panhandle, etc.

Also, in Canada the work force is far more competitive (higher unemployment
drives this). The person helping you at a fast food restaurant is a good
communicator, appears clean, and is helpful and good natured. Across the
border in the US, many fast food employees are noticeably less able.

So my hypothesis is that due to higher unemployment, many "homeless" in Canada
are in fact people who would easily hold down a job in the US.

The US homeless, on the other hand, almost all appear to have psychiatric
problems or substance abuse problems. I'd speculate that few US homeless would
be able to hold down a simple job even if they were given a $5K per month
stipend and fully subsidized apartment for the first year.

~~~
9oliYQjP
Here's a good essay on Canadian vs American unemployment numbers.
Structurally, the Canadian unemployment rate has largely tracked the American
one, but been higher. The professor who wrote this essay delved into the
reasons why and found that the unemployed in Canada were more likely to search
out work and therefore be counted as unemployed (i.e. the definition of
unemployed in both countries being folks who seek work but currently have no
job).

<http://faculty.arts.ubc.ca/criddell/canusune.pdf>

Also, Canadians have traditionally been supportive of quality public education
and other social institutions. The person serving coffee at a Tim Hortons
working minimum wage probably was in the same school system as the person he
or she is serving who might be a banker. Private schooling is typically
relegated to the upper middle class/rich, and those parents who want to send
their children to religious schools (e.g., Jews or Muslims, as Catholic
schools are fully publicly funded in many provinces).

Speaking as a university dropout and child of a middle class family in the
poorest, most stigmatized part of Toronto, it was expected of all my friends
that we get a post-secondary education. There was no question about it. Census
numbers seem to back this up ([http://www12.statcan.gc.ca/census-
recensement/2006/dp-pd/pro...](http://www12.statcan.gc.ca/census-
recensement/2006/dp-pd/prof/92-595/P2C.cfm?TPL=RETR&LANG=E&GC=35080)). There
were roughly 14 000 people aged 25-34 in that area of the city. Only 4 000 of
these people had no post secondary education. Anecdotally, there's a Catholic
high school in the area that installed a day care so that it could accept
mothers (usually unwed teenagers of course). It was a little bit controversial
when it was first started, but this was in the early 1990s long before these
kind of things were normal. Incidentally, that same Catholic high school also
supplied free condoms in their bathrooms, much to the dismay of the Church.
There's much more of a push to be educated here in Canada than what I see in
the U.S.. So that might be what you saw during your visits.

Also keep in mind that because we have universal health care, it's much easier
for the mentally ill to seek and get the help they need before it's too late
and they end up on the street. That said, I live in downtown Toronto now and
most of the older homeless that I encounter seem to be mentally ill or have
addiction problems. The younger ones usually come from abusive households, so
that's what drives them into the streets.

------
punnned
I read this article a while back: [http://www.allvoices.com/contributed-
news/4018083-beggar-ear...](http://www.allvoices.com/contributed-
news/4018083-beggar-earns-50000-per-year)

$50,000 (AUD) a year! no tax as well.

What do you guys think about a beggar earning more money as the average
Australian who actually works and earns money(I'm simply giving Australia as
an example because I live there)?

~~~
ahpeeyem
I think it's a scandal and a disgrace - SOMEBODY call 60 minutes!

But no, seriously, why do people have such a big problem with this? The person
begging and earning 50k is hardly getting money for nothing - I've done both
telemarketing and shopping mall face to face direct sales and that's not easy
or enjoyable. I think directly asking for money would be worse.

If someone spends 20 to 40 hours a week and manages to make a decent living, I
don't see how that is bad, and I'm sure I can think of jobs and maybe entire
industries that have a worse net effect economically or socially but are
considered OK.

There are definitely more dishonest yet not as maligned ways to make a living
than donning some old clothing and pretending to be poor.

~~~
gthank
People have a problem with this for a number of reasons, including but not
limited to:

1\. They feel duped. They gave some money to a person because they thought
that person was down on his/her luck, then find out that they were played.
People don't like being defrauded.

2\. They are intellectually outraged because the beggar has made a career out
of taking money in exchange for nothing of value, although some might argue
that the warm fuzzies provided by the act of giving count as something of
value.

3\. They are angry that these beggars are destroying good will toward other
beggars who are begging because they really do need help.

Of the ones I discussed, I image #1 is the biggest factor.

------
poundy
>Card 5: $75. Laurie buys $74.61 worth of food, phone minutes and cigarettes
at a gas station convenience store. Returns card.

Looks like Laurie checked the balance on the card and used it fully. She was
the only one to use almost the entire balance.

~~~
acangiano
To me, Laurie is the only one that has a shot at improving her condition.

~~~
thefool
She's been out of a job for 10 years...

~~~
acangiano
Obviously they are all in tough situations. However she spent the money
somewhat wisely, knows how to use a computer, skype, and has some programming
skills. She also sends out resumes. I'm not saying that she will make it, but
from this pool she is the one who may manage to get out of it.

------
kloncks
What really killed me was seeing the homeless buy or sell drugs/booze. I went
from a really wealthy suburb to a college campus that was more representative
of "the real world" and encountered the homeless on the edge of campus for the
first time in life.

At first, we'd give money and feel awful about the homeless situation. Then,
we saw a couple of the regulars making a drug deal. Then we saw that again.

After that, in my mind, any dollar I'd give isn't going for a McDonald's
sandwich. Instead, in my mind, I was practically buying crack for the homeless
myself.

The sad part is that I realize that it's likely that there's only a few bad
apples and they're not all representative of the whole batch...but it's enough
to let me say "no" without feeling guilty.

~~~
jacquesm
Everybody has their own way of rationalizing why something is not 'their
problem'.

You could buy some food and give that instead. I've had a guy panhandling
outside a supermarket here refuse food that I'd just bought because it wasn't
money. Clearly he wasn't hungry but to me that doesn't make me look at all
homeless people in the same way.

------
holychiz
these homes people seems awfully nice, but these are Canadians people we're
talking about here. Let see how they do, say...San Francisco? Hey, SF Chron,
are you listening?

~~~
zoudini
Yea, what about NYC?

------
jfornear
Insufficient sample size for drawing conclusions about target population.
/sarcasm

~~~
izendejas
Right, that shouldn't be the point of this article. I think the takeaway are
the personal stories.

Has anyone ever talked to a homeless person before? I recommend doing so from
time to time. It's easy to judge some of these "bums." You'll find out some of
these people have serious psychological/psychiatric problems (with
alcoholism/drug addiction being a result, not just a cause).

~~~
jacquesm
There was a girl living in a house of mine that stood empty for a year because
I couldn't sell it. Before then she was living in an old caboose.

We talked quite a bit, she was a gifted artist on the one hand and totally out
of touch with the world around her on the other.

She said she could talk to trees and was completely fascinated by eyes. Last I
heard from her she was living in Spain, doing drugs living on the street
again.

I don't think she was homeless out of need as much as that she simply chose
not to be a part of this society of ours.

~~~
mkramlich
I am not a doctor but from your description of her there's a good chance she
had schizophrenia. Her statements are consistent with it, and problems keeping
friendships and jobs leads to financial and social problems with then leads to
homelessness which then leads to more problems, including drugs, and it
snowballs from there.

If this was the case, the root affliction is not her fault, and she probably
needed anti-psychotic medication on a regular basis, and government financial
aid to keep her off the streets. Talk therapy is almost useless for that
condition. Though giving her shelter and helping her to keep social
connections is vital. So it sounds like you helped her out a lot.

~~~
jacquesm
I don't think it is possible to psycho-analyze someone based on so little
data.

If everybody that talked to trees or other spirits had schizophrenia you'd
have to include each and every religious person, to me their beliefs are just
as weird as someone talking to trees.

It's not that simple.

~~~
mkramlich
Agreed, thus the wording of my first sentence. However the belief that you can
talk to trees (delusion) combined with being fascinated with eyes (possible
hallucination or sensory distortion) combined with no job or home all adds up
to something highly consistent with schizophrenia. I've had a lot of direct
personal experience with someone who has this condition, and have done a lot
of reading and talking to doctors, so I have some basis for making this
estimation.

Regarding religion. That's complicated. It may very well be the case that some
people who make religious claims are in fact mentally ill. There are likely
also other people who claim to follow a religion who are not mentally ill:
they were either raised by their parents to believe that way, or, they chose
it.

~~~
jacquesm
> combined with being fascinated with eyes (possible hallucination or sensory
> distortion)

In an artistic sense.

A sample of what she could do:

<http://pics.ww.com/v/jacques/eckart/dscf1836.jpg.html>

------
kgo
I think asking them to return the card games the experiment. They might get
paranoid and think it's some weird undercover sting. Or more likely, maybe
they think they've found a sugar daddy who's going to start hooking them up
every week, so they want to play nice.

It'd be interesting to see if the results would be different if you just
dropped the card off and walked away.

------
zach
So am I the only one curious about the potential embodied in this experiment?

If you have accountability (via the credit card system) and challenge/reward
(through a broader giving community), maybe you have the beginnings of a new
and effective system for helping people.

~~~
wccrawford
But does it scale? Once you get beggars knowing they can get free money like
this, how much do their attitudes change? How many people start to scam the
new system? Does the scamming effectively prevent it from helping people who
actually need it?

And as pointed out in other comments, many 'homeless' are homeless by choice,
not because they can't get one. Some beggars aren't even homeless... They just
choose to ask for money instead of earning it.

It's very difficult to make a system work properly when all humans are
involved.

~~~
zach
Yeah, people will either go along with a game plan or game the system itself.
But maybe this is a way to structure in some freedom and personal connection
that isn't there currently.

The move to electronic benefits from paper food stamps has reduced fraud
substantially, and perhaps most significantly reduced the social temptation to
game the system. So it seems like there's a similar benefit possible from
moving from hard currency panhandling through rechargeable gift cards and
public-purchase credit cards.

If a Kiva-ish system is more beneficial than standing out on the street, maybe
you give people the freedom to stop structuring their life around panhandling
and give them incentives to live more independently.

And these tools could even help provide a system that actually fills the gap
between someone just making it in the working world and giving up on it for
the more toxic world of panhandling.

But it's true that you are facing the most enormous incentives to game the
system imaginable. It requires some really careful and clever reward design. I
know it seems a little overenthusiastic, but I keep thinking it would be
fascinating if there were a nonprofit that offered game design resources to
other nonprofits...

------
pacomerh
Became clear that the problem is not in the need of money, but in finding a
purpose, fulfilling an immediate need. If they had used the money in the most
efficient way, they wouldn't be there in the first place (obviously)

------
kingkawn
The minor side-story here is that all these cards probably ended up, even if
further used by the author, with small balances remaining on them. Pure profit
for the issuer.

------
pmorici
"...a man who had appeared with a can of beer and poured half into her paper
cup. Joanne appeared sober."

I wonder about the accuracy of this reporters story, after reading this
passage.

~~~
jacquesm
I think the operative word is 'appeared'.

------
known
"Give a man a fish and he will eat for a day. Teach a man to fish and he will
eat for a lifetime. " -Confucius

~~~
gloob
"Sit around feeling smug about your superior moral philosophy without doing
anything, and the poor bugger'll starve to death."

