Dallas or Tent City?

Pier Goldreich; Honorbound

Walking down the streets of Dallas there is little to no homelessness is seen by the naked eye. However, when you get closer to Downtown Dallas, near a homeless shelter that I volunteer at, the poverty level increases dramatically. From the moment you cross over Woodall Rogers Freeway, closer to the shelter, your perception of Dallas changes. The drastic change in the visibly lower income and the human capital of the people around the shelter also deteriorates. According to dictionary.com, the definition of human capital is: “the collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or their community”[1] Imagine you live in an apartment across from the shelter, you look out your window to find multiple homeless people lounging around outside of your building. First, my instinct would be to stay inside, however, that is not a practical situation. So, the person who is living in that apartment’s human capital is not being put to good use, they might be educated and in good health but unable to maximize their utility to fulfill daily tasks and attain full happiness.Homelessness has an effect on human capital through the lives of the homeless, how the lives effect the ones around them, and how their practically non-existent income affects an economies GDP.

In relation to economics, in chapter 9 of Naked Economics: Undressing the Dismal Science it explains how GDP affects those who are left homeless.  For example, “Even in the best times, a drive through Chicago’s housing projects is ample evidence that not everybody has been invited to the party.”[2] Studies show that if someone’s income is higher, than their utility is proven to be higher as well, however, this being said, money isn’t everything.

As the gap between rich and poor grows, the human capital of a homeless person grows. The rich are becoming richer and the poor are becoming poorer. As a result, the homeless population is rising. In order to keep the homeless population under control they figured out that in order to increase their maximum utility and increase their human capital that they would set up a tent camp. However the plan didn’t work, on May 4th the camp was shut down by the city of Dallas.[3] The closing of tent city increased the population of the homeless in Downtown.

The homeless do not contribute to the GDP of the country or even the state because they do not have income to contribute to businesses. The income the GDP receives is from the businesses who thrive during the work day. The supply is greater than the demand in a society that is covered in homelessness. If the homeless population grows larger than the population with homes, the economy will go into a recession. Homelessness if not put under control will affect the economy in a negative way and affect the lives of those living in poverty and the lives of the people around.

[1] “Dictionary.com”, Random House Dictionary, Dictionary, June 22, 2016

[2] Charles Wheelan, “Government and the Economy: Government is your friend (and a round of applause for all those lawyers)”, W.W. Norton & Company Inc., 2010 210

[3] Alexa Ura, “Dallas Hopes That Solutions Follow Closing of Tent City”, The Texas Tribune, May 17, 2016

Figure: Tasha Tsiaperas, “Lack of Affordable Housing Leading Cause of Homelessness in Dallas”, The Dallas Morning News, December 23, 2015

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