Why Homelessness is an Economic Issue
- Rebecca Ryan
- Nov 17, 2022
- 2 min read
Updated: Dec 3, 2022
Growing up in New Jersey, I have spent many weekends traveling to New York City to see many homeless people. I always wondered what the background of these people is and how their homelessness affects our world. As I began to study economics, I saw how homelessness has a profound effect on economic competitiveness.
As prosperous and economically active the U.S is, one could assume our country provides the resources necessary of basic needs for all of our citizens. A single day in January in 2018 in the U.S, there was 552, 830 homeless people. What is so shocking is how this homelessness problem exists all across the world, even in the wealthiest, more developed nations. What studies have found is the amount of homeless people is concentrated in cities. It is important to take into account the makeup of the homeless population. In 2020, 69.6% of homeless people were male, while around 29% are women.
Homelessness has extreme negative impacts. There are human and social impacts of homelessness, that pile on top of the economic costs. It is costly in many different aspects, from emergency healthcare to government outreach. A study from the National Alliance to end Homelessness found that a homeless person costs the average taxpayer a total of $35,000. It is important to note the cost depends on the individual and what their specific situation is. There was one study of a man who was an alcoholic and homeless, in an article by Malcom Gladwell, where his cost in service use was $100,000 per year. The costs per person involved taken into account the cost of emergency visits, jails, mental health centers, or longer hospital stays for example. Often homeless are arrested due to survival practices, like using a public area to sleep the night.
People tend to become homeless for a variety of reasons such as lack of jobs, increased unemployment rates, or unaffordable housing. There are many solutions that could help reduce the problem: creating more affordable housing such as rental housing or supportive environment housing projects for homeless with mental health issues or disabilities. The National Alliance to end homelessness found the U.S government spent 51 billion in funding for housing projects and programs in 2021.
Decreasing the rate of homelessness would in fact save money. An example of this is decreased legal costs, such as less arrests, detentions , or court appearances. One study found healthcare costs were reduced by 59% after two years of housing by The California Endowment and the California HealthCare Foundation.
As you can see, homelessness does affect the economy in a negative way. Most importantly, homelessness is direct a reflection of a country's housing market and how the economy affects individuals. What we need to focus is less on how homelessness affects the economy, and more on which parts of the economy need to be changed to decrease the amount of homeless every night.
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