Somewhere between 2 and 7 million people in America are homeless or sharing accommodations with another family. The most commonly suggested solution for this issue is to increase government assistance. Some will suggest greater incentives to provide low-cost housing, some recommend education programs to open more employment opportunities, and others attempt to criminalize the problem. Very rarely do we see anyone address the root issue: the prohibition of private contract.
Studies consistently cite a lack of affordable housing and unemployment as the top two causes of homelessness. Not coincidentally, many cities engage in various forms of rent control and virtually all enforce policies which have the effect of increasing housing prices. Not a single location in America is immune to creating unemployment due to wage rate floors. Any real solution to homelessness must begin with the allowance of private contract.
The existence of enforceable wage rate floors prevents individuals from legally earning enough money to provide for a basic subsistence living. Federal and state minimum wages prevent individuals from performing tasks which result in gains valued less than the prescribed wage. Quite simply, a potential employer will not hire an employee whose labor output is valued below the monetary compensation. However, when faced with the choice of working for a meager wage or not working at all, those who are desperate for income will readily choose a meager wage. For them, it is quite literally the difference between eating and starving.
People are quick to label this as exploitative, but this is an ignorant perspective. Would you pay someone to rake your leaves? Clean up trash in your neighborhood? Do your laundry? I would bet almost everyone would love to be able to afford to have someone clean their house every week. But the question is not whether you can afford to hire someone, but whether it is legal to hire someone at the wage rate you find profitable. Simultaneously, the question is not whether or not the wage rate you are willing to pay is exploitative, but whether or not another person is willing to accept that rate. So long as both parties are voluntarily in agreement, there is no exploitation, regardless of what other individuals may deem to be appropriate.
The second step is an exemption to housing regulations. Living in a ditch, under a bridge, in a cave, or in a tent is the result of prohibiting truly low income housing. A roof and four walls – regardless of wheelchair access, plumbing, electricity, or the hundreds of other legal requirements – is a major step up from living in a cardboard box. Allowing individuals to determine what is or is not adequate housing is the only moral and efficient way to end homelessness.
In sum, the biggest hurdle to turning one’s life around is the existence of institutional barriers intended to protect the very individuals who are harmed by them. It is time we try freedom.