Finnish and klaar with universal basic income
Finland decided to try out the idea that so excited the world in the mid-2010s, but they rapidly lost their enthusiasm
Finland has decided to end its experiment with a universal basic income, in which people are paid an unconditional salary by the state instead of benefits.
The idea of a universal basic income has high-profile champions such as Richard Branson, Facebook boss Mark Zuckerberg and Tesla CEO Elon Musk. But the Finnish government’s enthusiasm for a pilot scheme, a European first which garnered worldwide attention, is petering out.
Calls for extra funding for it were rejected and the two-year trial will not be extended after next year.
In the scheme, 2,000 unemployed Finns, picked at random, received a flat monthly payment of €560 (R8,438).The government will now look at other ideas to reform its social security system.
Supporters argue that a universal basic income would provide a safety net and boost innovation, creativity and personal wellbeing, and help the unemployed find temporary work.
It would counteract the insecurity of increasing number of short-term contracts offered to employees and boost labour mobility by encouraging workers to take the risk of moving jobs, they claim.
“The eagerness of the government is evaporating,” Professor Olli Kangas, one of the experiment’s designers, said.
Kangas said the government had turned down a request to expand the scheme to pay up to £61-million to fund the basic income for employed Finns rather than the group of 2,000 unemployed people.
Finland’s unemployment rate of 9.2%, higher than its Nordic neighbours, and complex benefits system had fuelled calls for an ambitious rethink.
A report by the Royal Society for the encouragement of Arts, Manufacturers and Commerce said in February the British government should consider giving £10,000 to every British citizen under the age of 55 as part of a universal basic income fund.First Minister Nicola Sturgeon called for research into the idea for Scotland in 2017, while the idea was part of the UK Green Party’s manifesto that year.
In February, the OECD think tank said a universal credit system replacing benefits payments with a single sum, such as that being introduced in Britain, would work better than a universal basic income.
In 2016, Swiss voters rejected a plan to introduce a guaranteed basic income for all, regardless of whether or not they were employed.
More than three-quarters of referendum voters opposed a plan offering an unconditional monthly income of £1,755 for each adult and £458 for each child.
– © The Daily TelegraphUniversal basic income at a glance
Universal basic income is a form of cash payment given to individuals, without means testing or work requirements. In some models this is at a rate sufficient to cover all living expenses.
Proponents argue that:• The lack of expensive means testing leads to a higher proportion of the budget going to recipients. This would be more efficient;• The transparency of universal payments would drastically reduce the need to detect benefits fraud;• One scheme could replace the current complex arrangement of government benefits, rebates and tax rebates;• Work will always benefit recipients of this welfare, rather than the “benefits trap”.
Critics argue that:• Universal income may be inflationary and, in attempting to move all individuals out of poverty, it may simply raise the level of the poverty line;• It may reduce the incentive to work, and studies have found some evidence to support this;• A reduction in taxable income would reduce the government’s ability to cover other expenses, such as healthcare.
Universal income as a policy dates from at least Thomas Paine’s 1795 Agrarian Justice. It is currently more closely aligned with left-wing politics, where it would be funded through income from nationalised assets.
Several other countries are experimenting with a universal basic income, including Canada, Kenya and the Netherlands.
– © The Daily Telegraph