New Research Shows Job Loss — Not ‘Personal Failure’ — Is Driving Thousands into Homelessness
Homelessness is not caused by personal failure — it is what happens when work no longer protects people from poverty. That is the central finding of new research published in the Journal of Social Distress and Homelessness, which shows how a single lost paycheck can trigger rapid downward spirals for people surviving on razor-thin margins.
The study draws on 365 in-depth interviews from the California Statewide Study of People Experiencing Homelessness (CASPEH). Researchers found that people working in construction, home health care, gig delivery, warehouse jobs, and other low-wage sectors often slipped into homelessness after a layoff, an injury, a cut in hours, or the death of a client they were caring for.
Sometimes the descent was gradual — burning through savings, doubling up with relatives, taking on temporary work. Sometimes it was instant: lose your job, lose your housing.
“When someone loses their job, it can be the brink.”
That’s how Monica Davalos, Senior Policy Analyst at the California Budget & Policy Center, described the tipping point in an interview with Invisible People.
“Fundamentally, we know people fall into homelessness because they cannot afford their housing,” she said. “When someone loses their job and they don’t have sufficient safety-net supports or unemployment benefits or a social network to keep them afloat, that can be the brink that pushes them into losing their home.”
Davalos emphasized that while homelessness can touch anyone, the burden falls heaviest on low-wage workers and people of color.
“It disproportionately impacts low-wage workers and Black, Latino, American Indian, and Pacific Islander Californians,” she said.
CASPEH data echoes that reality. Many interviewees were paying 50–70% of their income toward rent. When income disappeared — whether because of injury, unstable scheduling, or gig-economy misclassification — even one missed payment could start the slide into homelessness.
Hidden Homelessness and Who Gets Counted
Davalos also noted that Latino homelessness is growing — but often remains unseen.
“It’s more often doubling up, overcrowding, or living in cars or RVs in ways that aren’t visible,” she said.
Traditional homelessness counts rarely capture people staying on couches, living in packed apartments, or sleeping in vehicles. As a result, thousands of job-loss cases never appear in official data.
She also emphasized another systemic gap: most single adults — who make up the majority of California’s homeless population — are excluded from most cash-assistance programs.
“Our safety nets were not designed for adults without dependents,” Davalos said. “There’s simply not much for them to apply for.”
Unemployment Insurance rarely covers rent, either, leaving many people with impossible choices.
A Parallel Story in Nashville:
“Everybody is just a paycheck away.”
If CASPEH shows how job loss precipitates homelessness in California, Kennetha “The Homeless CEO” Patterson shows how the same pressures unfold across the country — in Nashville, Tennessee.
Patterson is a mother, grandmother, Section 8 voucher holder, SNAP recipient, and longtime member of Nashville’s Continuum of Care (CoC) Homeless Planning Council. She has also experienced homelessness herself.
“Everybody is just a paycheck away from probably experiencing this,” she said. “Especially with what’s going on.”
Recently, Patterson and other people with lived experience served on advisory committees created to guide city policy. They were supposed to receive stipends for their expertise — sometimes grocery gift cards, sometimes direct deposits.
Then the payments stopped.
“We haven’t been paid since February 2025,” she said. For one young participant, she added, “That’s the only way I get the food that I don’t have to scrounge for.”
The impact was immediate.
“With job loss, it affects everything,” Patterson said. “Eating, paying our phone bills, having transportation, housing. It affects everything.”
The recent federal shutdown that disrupted SNAP benefits hit her family directly.
“We help our church with breakfast ministry,” she said. “When our benefits were suddenly in question — that shook the little safety net we’ve been creating for our community.”
Criminalizing Survival
Patterson said the colder months often reveal just how few options people truly have. With shelters full and warming centers limited, some unhoused neighbors feel driven into heartbreaking choices — including intentionally getting arrested simply to sleep indoors.
“When it’s starting to get cold, they’ll on purpose get arrested to get housing,” she said. “It starts this cycle where police think they’re ‘bad people,’ but they did it just to be able to have shelter.”
Even then, safety isn’t guaranteed. Patterson described a domestic violence survivor who begged officers to arrest her so she could be safe in a cell.
“They refused,” Patterson said.
Meanwhile, people trying to improve the system — like Patterson and other lived-experience leaders — are often unpaid or underpaid.
“You not showing up looks like you don’t care,” she said. “But really, it’s the financial piece. If our phone gets cut off, we can’t communicate. If we don’t have bus fare, we can’t get to our meetings.”
The Cost of Ignoring Lived Experience
For Patterson, the path forward must include prevention and peer support — especially for people on the verge of homelessness after job loss.
“There is a point where if we do prevention work, it will cost so much less to keep people housed,” she said.
But the very people best positioned to prevent homelessness are rarely compensated fairly.
That’s a nationwide problem, said Dr. Malaika Rumala, founder of the People with Lived Experience Institute — a grassroots effort created to “center people with lived experience as the source of solutions.”
“People with lived experience expertise continue to contribute to addressing systemic inequities — while not being paid, being severely underpaid, and/or barely surviving,” Rumala said in a written statement.
“This built-in practice that has become the norm is exploitative. Lived experience is a valuable expertise deserving of valuable compensation. The solution is intentionally treating people with lived experience with dignity and paying for the value of that expertise in a way that enables thriving instead of barely surviving.”
Patterson puts it more simply: unhoused people, she says, are “jewels waiting to be discovered.”
Why Working No Longer Guarantees Stability
Back in California, Davalos points to the core structural issue.
“Wages simply haven’t kept up with the cost of living,” she said. “If someone can’t pay their rent and buy their food and pay their health care expenses with their wages — even if they’re working a minimum-wage job — that means that job is not supporting the cost of living. That’s a structural failure, not an individual one.”
The CASPEH study mirrors her conclusion. Interviewees described:
- work-related injuries that ended income overnight
- gig-economy jobs with no safety net
- caregiving jobs dependent on a single client
- COVID-era layoffs from which they never recovered
For some, homelessness came within days. Others held on for months before the final domino fell.
The researchers argue that these moments — a layoff, a medical crisis, the death of a client, or the end of even a small stipend — should trigger rapid prevention: emergency rental assistance, legal help, income support, and real decision-making power for people with lived experience.
Davalos agrees.
“We know what works,” she said. “Invest in affordable housing tied to income. Invest in homelessness prevention and rapid rehousing. Strengthen the safety net and push for higher wages.”
Until that happens, those closest to the crisis will keep sounding the alarm.
“Homelessness is not the individual’s fault,” Davalos said. “It’s a systemic problem.”
And as Patterson reminds us from Nashville:
“Everybody is just a paycheck away. We’re not the problem. We’re part of the solution — if anybody’s willing to listen.”