Can we trust poor families with a lump sum of cash?

Can we trust poor families with a lump sum of cash?

I ran across this interesting article in The Globe and Mail:

It's about a new idea in social policy that's had some success in other countries: giving the poor a lump sum of cash as support and trusting them to do what they like with it, rather than making them jump through hoops in social programs like welfare, WIC and food stamps. It's called a cash transfer, and research shows promising results.

It reminded me of a conversation I had recently with a former welfare caseworker who worked in Chicago for 20 years.

Many of the clients he saw every day, he said, were referred to his office from Cook County hospital --people who needed treatment, but couldn't afford to pay.

The hospital wanted them to apply for Medicaid, but if they didn't have children, they had to be labeled "disabled," which meant a huge amount of paperwork and copies of medical records. If they were able to cobble it all together, their file would then be sent down to Springfield for review, to see whether the state thought they were disabled.

The caseworker told me that quite a few were rejected. The reason? The client was said not to be disabled because he or she could certainly work if they just got some medical care to deal with their condition.

Of course, the reason they were in the office in the first place was because they couldn't afford decent medical care.

If they are labeled as disabled, they could get the medical care that might enable them to work. But if they want to keep receiving benefits, they can't work. That would mean they're not disabled.

It's catch 22s like this that come to mind when I read the Globe and Mail article. The rules in the U.S. are staggering, and many either prevent people from getting the help they need or ask them to remain dependent in order to get it.

Certainly, if we give out lump sums of cash, there will be people who just blow it on drugs, gambling or alcohol. But the current social safety net isn't immune from fraud either. The research in the story is compelling, showing that most people who are given cash transfers use it to educate themselves and take care of their children.

"Poverty is fundamentally about a lack of cash. It's not about stupidity," said Dr. Jospeh Hanlon, who researches the cash transfers.  "You can't pull yourself up by your bootstraps if you have no boots."

But could the idea ever fly in the U.S.? With our belief in the American Dream, I wonder if it'd be possible to convince people that poverty is not about failure to work hard enough, but indeed about not having money.

Americans, we seem to believe, are born with boots.

Photo credit: Shutterstock/Grungy Old Work Boots

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