Poverty · Economy

Is it a better idea to provide poor people with cash rather than welfare benefit like food stamps?

Tyrone Thomas Jr.

March 15th, 2016

I'm starting a social enterprise with a business model that provides cash directly to poor people through the private sector, with the goal of taking them from dependency to independence. Just wanted to know what smart people on this site think.

Linda Raglione Professionnelle administrative bilingue possédant une solide et vaste expérience dans des secteurs variés de l'industrie

March 16th, 2016

People feel validated when they receive money for their efforts. This is why the welfare system is detrimental to a person`s well-being. 

Chris Rider (Founder) Director, R&D/Tech at DirtGlue Enterprises, www.dirtglue.com

March 16th, 2016

Giving anything (EBT cards, cash, food stamps, etc, etc) away for free is a bad idea and benefits nobody in the long run.
It is better to give poor people education so that they can earn their own way and gain self respect at the same time.

Mikael Löwgren SAP Consultant at Avega Group

March 15th, 2016

I think it's a great idea. I don't know much either. There is a paper in Sweden that helps homeless to sell the paper on the street and earn money from it. They also support to get the people out of their situation.
I think a model like this is dependent on the public trust of the business and the homeless that money don't go to something else. It's easier for people to accept foodstamps. So I think the business needs to be more transparant and give examples of success if cash is used.
The swedish paper is declaring how they use the money to help people and they also write success stories in ads and in the paper.

http://www.situationsthlm.se/var-verksamhet

Derick Smith

March 15th, 2016

Tyrone, the issue, as approached by universal income proponents, is for such income to be non-discriminatory. There are many purposes for it, and it should come with minimum bureaucratic cost. Then it works out cheaper than any form of social security where people have to jump through hoops. This will probably be a requirement anyway to keep the consumer cycle going as people get replaced by autonomous software and robots.

As a private enterprise its a tough call. It is really something governments should do.

Dimitry Rotstein Founder at Miranor

March 15th, 2016

What exactly does "provide cash directly" mean?
If the idea is simply to give cash to the poor as a charity and do nothing else, then I don't think that would help them become independent. On the contrary, that may well make them dependent on that charity.
If, on the other hand, they are provided with information and tools that will help them get a job and learn to manage their income in an efficient and appropriate way, then giving them some cash to get them started (e.g. buy decent clothes for the job interview, rent an apartment close to work until the first salary...) is a great idea and I wish you luck with your enterprise.
Although personally I feel that it is a duty of the government to do such things, but let's not go into politics :-)

Thomas Sutrina Inventor at Retired Pursue Personal interrests and family

March 18th, 2016

Here is a quote that says a lot about any way of giving out money in the wealthy western countries.  Under develop countries have other issues, corruption.

"Walter E. Williams, a George Mason economist and author of “Race and Economics: How Much Can Be Blamed on Discrimination?” is not a fan of the welfare state that exists in the country. In an appearance on Thursday night’s “Stossel” on the Fox Business Network, Williams argued that welfare
has done more damage to black society than slavery or Jim Crow.
“[T]he welfare state has done to black Americans what slavery could not have done, the harshest Jim Crow laws and racism could not have done, namely break up the black family,” Williams said. “That is, today, just slightly over 30 percent of black kids live in two parent families. Historically, from 1870s on up to about 1940s, and depending on the city, 75 to 90 percent of black kids lived in two parent families. Illegitimacy rate is 70 percent among blacks where that is unprecedented in our history.”
But this isn’t just relegated to the American welfare state, but is seen in European welfare states as well.  . . .
Along with the decline of the black family comes anti-social behavior, manifested by high crime rates. Each year, roughly 7,000 blacks are murdered. Ninety-four percent of the time, the murderer is another black person. . . . Though blacks are 13 percent of the nation's population, they account for more than 50 percent of
homicide victims. Nationally, the black homicide victimization rate is six times that of whites, and in some cities, it's 22 times that of whites."  http://dailycaller.com/2011/06/04/walter-e-williams-on-welfare-as-govt-plays-father-blackmales-
have-become-dispensable/#ixzz40GiegQWe

Jacqueline Chu Executive Director of Field Operations, Division of Early Childhood Education at NYC Department of Education

March 15th, 2016

Tyrone, can say a little more about your model?  Would this be like microlending or something else?

Dimitry Rotstein Founder at Miranor

March 15th, 2016

Hmm, Tyrone, you do realize that you have told absolutely nothing about your idea? "Combined business models, cost effective plan, no-brainer..." - sounds more like a riddle than a description of an idea.

Dimitry Rotstein Founder at Miranor

March 17th, 2016

 I hope this explanation clears a few thing up.

A few, yes. But it's still rather abstract and fuzzy. I'm afraid I still don't have enough information to help you in any meaningful way, so I'll just bow out, after wishing you all the best with whatever it is you're doing.
I do hope that if and when you meet potential co-founders and investors you explain things much more clearly and don't require them to sign any NDA. No serious entrepreneurs and no investors in their right mind will sign an NDA just to hear out your idea.

Tyrone Thomas Jr.

March 16th, 2016

Apparently the concept is being totally misunderstood. This is probably somewhat my fault for not stating things differently.

This program is not designed to give free money to poor people, it requires them to earn it through their purchasing activity just like everyone else.

We are simply plugging poor people as a group into an existing cash back marketplace.

We providing a service that redistributes money that they receive through this marketplace and provide a way they could collectively use it to improve their economic situation as a group.

Someone else said they are confused about what we are going to do after acquiring the members and money. This is also explained in the how it works section provided...i.e. give it back to them according to our proprietary redistribution formula...that's it...need there be more? Perhaps you are looking at it from only an investor's capitalistic point of view.

The overall goal is a continuous recirculation dollars from the private sector back into the pockets of the lower class so that they can stop relying on social net programs, take advantage of more opportunities and contribute more to communities rather than maintaining a bourdon to society status. I hope this explanation clears a few thing up.