In the welfare office at City Hall in Utrecht, The Netherlands, Geoff and his partner, Talita, are getting ready to enroll in the city’s welfare program. (Both of them declined to give their last names.) Until recently, they ran a Thai restaurant in Utrecht. “These last four weeks have been the hardest of my life,” says Geoff. “[We have] no money. We just lost our business, and all our friends are gone.”

The welfare benefit in Utrecht provides a monthly payment of 900 euros (about...

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