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November 24, 2021

Contextualize Everything, Part II: Government/Press [Joe Mannix]

Rounding out the series on viewing reported figures and arguments suspiciously, identifying gaps and trying to fill them in, let’s look at a government initiative as reported by a local paper.

Let’s pick a local (though large, and in a large locality) matter with fairly straightforward facts. This example comes from San Francisco, as reported in the Examiner (via archive.is) and is about the “homeless crisis” in that city.

Mayor London Breed is proposing more than $1 billion in new funding to address homelessness over the next two years -- a staggering amount that she hopes will finally make a dent in San Francisco's most vexing problem.

That proposal, announced Tuesday as part of her wider plan for the city's upcoming $13.1 billion budget, is on top of the $300 million or so already spent directly on homelessness each year.

It's unclear how many homeless people there are in San Francisco, but the number has certainly swelled over the past few years. The city's official count in 2019 logged more than 8,000 homeless, a 30% rise from two years prior. Other counts have suggested there may be as many as 17,000 homeless in the city.

The claim: spending dramatically more money will help the city’s homelessness problem and is the right thing to do.

Let’s see what facts we have available. I’ll include some more numbers in this, but they all come from the article unless otherwise noted. Basic facts:
• The city spends $364 million per year directly on homelessness (a lot more than the stated “$300 million or so” in the upper part of the article)
• The city budget is $13.1 billion
• The city will add a billion more dollars over two years
• There are 8,035 official homeless and 17,000 potential homeless
◦ This is between 0.9% and 1.9% of San Francisco’s total population of 888,549 people per the Census Bureau.
• The recent growth rate of homelessness is 14% in two years
• Spending on the homeless grew by more than 80% since 2016

So the two-year total will be $1.728 billion, assuming no budget growth and that revenue projections are correct. The average annual total will be $864 million. The total homeless at the start of the first year will be between 8,035 and 17,000. At the end of the second year, it will between 9,160 and 19,380 assuming that growth rates are both correct and hold steady. Let’s be pessimistic and use the second-year numbers for the entire analysis because it’s easier, though the per-capita totals will deflate a bit.

So let’s add some context. Using the official homeless population and assuming 14% growth, that comes to a whopping $94,323 per person per year. Using the larger unofficial number, that’s $44,582 per person per year. The two-year total is of course double that. But what would it be without this billion dollar increase? It would be, of course, a lot less: between $39,737 and $18,782 per person per year, depending on which homeless population estimate you use.

So now we have it individual terms, before and after - but what about additional context? How poor is poor? How does this spending compare to people with incomes? According to the Census Bureau, the per-capita income in San Francisco in 2019 was $68,883 and the median household income was $112,449. Somewhat helpful, but what about in terms of our current and new spending levels? Of the 365,851 households in San Francisco, the Census Bureau estimates that:
• ~38.3% of all households earn between $10k and $100k
• ~19.9% of all households earn between $10k and $50k
• ~14.1% of all households earn between $10k and $35k
• ~9.9% of all households earn between $10k and $25k

So it’s a big increase, from a big base figure. The highest per-capita figure (“new spending per official homeless person” ) puts that homeless person near the 40% level of household income in the city. The lowest per-capita figure (“current spending per potential homeless person” ) puts that homeless person at around 10% equivalent.

It is important, however, to also keep in mind that this is not all the money involved. This is just “direct spending” on the homeless. There are other programs - drug and substance abuse programs, food assistance programs, housing assistance programs and various other welfare programs - that are not included in this total.

What they want you to think: We need a lot more money to deal with the homelessness problem, and we’re doing the right thing by spending an additional billion dollars (or 137% more) than we do today.

What the context adds: Compared to the working poor in San Francisco, current spending levels mean that the homeless already receive more than the bottom 10% of wage earners in the city who earn more than $10k, and potentially more than perhaps 15%. With the proposed new levels, the homeless will receive an amount of money that puts them above at least the lowest ~15% of wage earners, and potentially above the bottom ~38% of wage earners in the city. This is a staggering sum and becomes extremely (to borrow a Lefty word) problematic.

The proposal is to spend on the potentially ~2% of the people who are homeless an amount that would make them equivalent to the low or low-middle wage earners in San Francisco – at a minimum. Moreover, this would represent 6.6% of the total city budget, to be spent on no more than ~2% of the city population. All of this is just on direct spending and does not take into account any other assistance. The direct spending for the homeless has been increasingly dramatically since 2016, while the homeless population has skyrocketed.

A better-informed conclusion: The amounts of money we’re talking about are truly staggering and do not represent effective investment or government assistance. Such overspending is fiscally irresponsible, unfair to the working people (and especially the working poor) and, based on the already-generous levels of homeless spending in San Francisco, the ever-increasing homelessness problem is unlikely to be solved by elevating the spending even further.


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posted by Open Blogger at 05:15 PM

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