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The Long Term Economic and Social Costs of Homelessness: An Analysis


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Recently, when WMAY sat down with Josh Sabo, the executive director of Heartland: HOUSED – itself an offshoot of The Heartland Continuum – which focuses on homelessness, its functional eradication, and other issues that fall under the umbrella of the United States Housing and Urban Development agency in Springfield, a particular point that he mentioned stuck out amidst everything.

“The experience of homelessness is inherently traumatic. Developing a system that effectively addresses homelessness is an important element of overall community health. We often say housing is healthcare because being unhoused can create many additional negative health impacts for people who experience homelessness. 
Additionally, on a community level, the costs associated with historically not addressing homelessness effectively are high. Money is spent on shelters, staffing, outreach and other services, meals, police response, ambulance calls, and Emergency Room visits. Studies say that communities often spend around $40,000 a year to cover all of these costs. 
Through our strategic planning process, we project that a household could be supported in permanent housing for $13,000 a year….”

Approximately $27,000 a year per person – either to save or to additionally invest into that person – is a fair amount of money. While, on the one hand, saving that by creating a more proactive communal and social system is an economically sound innovation – as well as moral, of course – there is, of course, the other hand. 

And on that hand, one can consider that, through the largely reactionary and shortsighted policies concerning homelessness over the decades, roughly and at least $27,000 per person – of taxpayers’ money – has basically been wasted.
In 2021, The National Alliance to End Homelessness via figured and calculated that the federal government of the United States had – alone – spent $51 billion dollars to end homelessness in only a very limited scope. As for Illinois, The Center Square reports that $360 million will be poured into fighting homelessness in the previously presented state budget for the upcoming fiscal year; while that is a larger number than has been previously seen, cities and states have been working to end this growing nightmare for many, many years. 

When extrapolated out over decades and decades – without the type of success that might be expected for such funding at all levels – the need for substantial investment in alternative means of uplifting people becomes both apparent and evident; history supports this quite clearly, to be fair. 

That money has been long wasted because the idea of spending more money to fix and address the real, root problems of homelessness and housing insecurity, was – for so many decades in states and across the nation and great swaths of the world – deemed too costly.

Deferring those costs years, decades, even centuries, has actually only wasted greater amounts of money and resource all the while, however. While proactive innovations have long been both touted and shouted down, untold amounts and weights of money and material have been spent to maintain homelessness by failing to fix what produces it in the first instance.

Those issues and the various, interconnected problems within those issues – that of education, social safety nets, better avenues for people to find the help they require in any respect, and to find jobs and careers that are meaningful, as well as well-paying. One is reminded at this juncture, by quotes from both that famed Roman statesman Marcus Aurelius, as well as by Economist John Maynard Keynes.

“What’s bad for the hive is bad for the bee” – Marcus Aurelius

“The difficulty lies not so much in developing new ideas as in escaping from the old ones.” – John Maynard Keynes

Considering the statistics, morality, and practical realities of things together as we must, the historical and present-day, long-term economic – not merely social – costs of homelessness begin to emerge from the conjecture, talking points, studies, and aforementioned data and records. 
That additional $27,000 from the start of this piece is, to put it differently, really only the start of the total individual, collective, and historical costs of homelessness; the millions and billions too, do not speak the full breadth of the waste.
Yet if these substantial chunks of change are what is suggested to be superficially wasted in Illinois and across the United States each year through the provision of inadequate social safety nets for individuals who become financially destitute or without permanent shelter, might there be further, hidden costs – in one form or another – as a result of this blight as well?
If there is other obvious, economic waste, can society – let alone Springfield – really afford to be apathetic concerning homelessness and the housing insecure? 

$27,000. Stated as it has been four times at this point, it is the amount studies roughly indicate separates what it currently costs communities to do less concerning homelessness, from what it would cost if they invested more fully in a proactive plan and solution for solving the existing problem more effectively while ensuring others do not suffer a similar present or future. 
Then there are the millions and billions spent by cities, states and an entire nation on the problem – the aforementioned $360 million and $51 billion for Illinois and the US, respectively.
But what about the longer-term economic impacts of not working – earning money for the individual as well as for the employer – and the economic underconsumption that is the inevitable result for the homeless, everyone else, and the greater society as a whole?
Those questions, after all, must factor into the discussion as well. The “cost” of something often refers to an item of expenditure, but, of course, the meaning is contextual and, therefore, nuanced.
In regards to the homeless and housing insecure, the economic “cost” of failing a community’s moral or social obligation is not simply that the community – town, city, state or nation – has to pay more money than it ought to, but that all of the further economic impacts that those individuals would be expected – statistically speaking – to produce over the course of months, years, and decades is lost as well.
For a moment, one might take the median estimated annual income of those with less than a high school diploma, those with one, as well as those without a college degree but with credits and the like.

Those three numbers – $32,552, $42,068, and $46,076 – taken together – and divided by three – leave us with $40,232 in average salary. To assume then that $40,232 of production – not enough to live on mind you – could be lost over a year when just a single individual is left to languish without help and assistance in reconfiguring a life dealt hardships and difficulties is not an outrageous assumption to make.

Now, that money – that $40,232 – gets paid out across society when it is earned for working a job too – producing revenue for a business and its owners and shareholders, as well as tax money for the relevant institutions.

Spending that earned money at businesses and across society allows for workers to be hired to produce more economic function – earning money to spend themselves all the while. And what about the tax money collected from individuals who both work and spend money? On and on and on it goes.

But costs – in society – cannot simply be boiled and distilled down into capital figures and financial spreadsheets as they are so often in business. People are, after all, not numbers, but living, breathing beings – of which we are ourselves, of course. 
So what about those on the street who cannot work? What about those who have real, true and serious medical, mental health or substance issues? What are the costs which they bear? And what are the costs that we must bear for leaving them to their place and circumstance?!

Not only do individuals often sit in conditions not suitable for human beings to shelter in when left out upon the roads and boulevards and without consistent sources for food – let alone good and healthy food – but they often find themselves stuck without the proper medical, psychiatric or substance abuse care or counseling to help themselves reverse their fortunes either.
This all too has an economic – as well as a social – impact. There are people who require professional care, and there are remarkable, professionals who care for people scattered around Springfield, Illinois, and the greater nation itself.

Getting people healthier, safer, more functional, and – ultimately – happier, will give a relatively large portion of the homeless a real lifeline, and the opportunity to live more comfortable, communal, prosperous and safe existences within society; the society itself will benefit as well – and all by ensuring better lives for its people.

The long-term economic and social costs of homelessness are great in a nation with nearly 600,000 documented homeless people by the government definition – and countless millions more who suffer from chronic housing insecurity and other definitions of homeless.

In Springfield, a city of approximately 114,000 people and an estimated homeless population in the two to three hundreds, the costs are still too high. They are too high, however, not for exclusively economic reasons, but for the plainly human, ethical and moral ones laid out and stated as well. 
Again, people are not composed of or simply expressed by paper dollars, pounds, euros or metal coins. They cannot be wholly or adequately judged through economic value, production or worth alone. They are beings who have pasts, presents, futures, memories, and aspirations; they must be considered and thought of as we would consider and think of our partner, our child, our neighbor and our fellow person on this planet. 

For, to be sure, these are commonalities are those shared by every person upon the earth. And, in the final analysis, as has been said and stated by various religions, secular and divine governments, philosophers, leaderspublic and private – poets, teachers and parents – amongst others – we must still learn to love and treat others as we would wish to be loved and treated, and we must look to build a society that takes care of its most vulnerable and disenfranchised, wherever, and whoever they happen to be; the cost and price of inaction always end up being greater than the costs of decisive action – and the most vulnerable always pay the greatest price of all.

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