Thursday, March 15, 2012

Homeless hotspots are euvoluntary

The outrage of the week has been over a marketing firm that paid homeless people in Austin, Texas to carry portable Wi-Fi transmitters. These "homeless hotspots" received a daily wage and patrons were encouraged to give donations for the privilege of using the 4G network on their smartphones, tablets and laptops.

You can guess what happened next. People with nice roofs over their heads divided into two camps. One group loved the innovative idea that both gave money to the poor and provided a public good. The other saw it as dehumanizing and evil.

To find out who's right, let's turn once again to Mike Munger's concept of euvoluntary exchange and see if it meets all six requirements.

#1 conventional ownership

BBH Labs, the agency that created the program, owns the Wi-Fi equipment and made the shirts the homeless workers wear to advertise the service.

#2 conventional capacity to buy/sell

Homeless people are accustomed to collecting coins and small bills from strangers. Sometimes it's a tip for performing a task like shining shoes, wiping a car windshield clean or playing an instrument. Providing Wi-Fi is in the same vein.

#3 absence of regret

When NPR's Kai Ryssdal got the bright idea of asking what the actual homeless people who participate in the program think about it, he was enthusiasticly told they all love it and would gladly participate again.

#4 no uncompensated externalities

Claims that being exposure to Wi-Fi waves harms people is complete pseduoscience.

#5 neither party coerced by human agency

The only homeless people I heard who didn't want to participate in the program were concerned they wouldn't make as much money as begging.

#6 neither party coerced by circumstance; the disparity in BATNAs is not "too large"

The BATNA's appear small, as the most likely alternative is begging. Both tactics involve expecting strangers to fork over money, but with the mobile hotspot they have a great icebreaker.

Homeless Hotspots are a perfect example of euvoluntary exchange. The critics are right to say it's a shame that people can be homeless and have no better job opportunities than hanging out on the corner wearing a transmitter and a shirt with their name on it.

However, banning or discouraging these devices wouldn't solve the underlying homelessness problem. Instead, it would deprive these eager participants of a chance to interact with people in a fun atmosphere while making good money.

If you want to help the homeless rise above poverty, the solution is not to kick ladders out from under them.


  1. I don't think this is the type of thing that's going to help homeless people rise out of poverty, but sure it's relatively harmless and more of a public good than panhandling.

    Another point you may have wanted to add is whether the wage given to the participating homeless people is fair, or is it exploitative?

  2. Scenario 1: Some of these people sit there and do relatively little.

    Scenario 2: Some of these people sit there and do very little, plus people nearby get wifi, plus they likely make a better living than they would have otherwise.

    I know which option I would be taking if I were homeless. I also have a hard time finding examples of real exploitation. When a business hires people who need jobs at low rates that is exploitation. But when business's need employees and some people demand higher wages, that isn't?

    It's never made sense to me. If people are freely entering into agreements with other people, it's hard to justify being outraged on their behalf.