Finland becomes the first European country to pilot a basic income scheme. Could unconditional monthly sums curb mass unemployment and create more equal societies?
The Finnish government has launched a two-year experiment offering a guaranteed sum of €560 (£475) per month to 2,000 unemployed Finns. It hopes the pilot, which began on 1 January, will reduce bureaucracy and poverty, and boost employment. For the randomly selected participants, the cash sums will replace their existing social benefits and will continue to be paid even if they take up jobs. The current Finnish system can discourage people from finding jobs because even low salaries can mean benefits payments are significantly reduced. Unemployment in Finland is currently at 8.1 per cent.
“Basic income is kind of a symbol that we believe in your capacity and we think that you are actually able to do things which are beneficial to you, and also for your community,” Heikki Hiilamo, a professor of social policy at Helsinki University, told the New York Times.
The concept of basic income has been gathering interest from legislators and governments in recent years, from the Netherlands to Canada. European countries in particular have warmed to the concept of incentivising work through blanket financial support. But this is the first national trial of an idea that was first mooted by English-American political theorist Thomas Paine in 1797.
In Finland, the 2,000 people – aged between 25 and 58 – will receive monthly lump sums free of charges and taxes. The Finnish government has set aside €20m for the experiment. A reported 51 per cent of Finns are in favour of basic income, but the plan has also faced political opposition from both the left and right. Some have dubbed the scheme a state handout, arguing it lacks strict guidelines and could hamper people’s motivation to maintain jobs.
Professor Olli Kangas is director of research at Kela, Finland’s social security body. He told Positive News: “Since the basic income is very controversial in political terms it is impossible to say what will happen. For the supporters the basic income is a gift from heaven and for the opponents it is an invention of Satan.”
Marjukka Turunen, head of Kela’s legal affairs unit, said basic income could not only be beneficial for long-term unemployed people and those with mental health conditions, but also for economic sustainability. By encouraging recipients to seek employment, removing disincentives to work and reducing bureaucracy, it could simplify Finland’s benefits system and help people better map out their finances by providing a feeling of security, she says.
Authorities in Switzerland, Scotland, France and the Netherlands have all recently announced an interest in running basic income pilots in the coming years. A survey carried out last year by Dalia Research found that 68 per cent of people across the 28 EU member states would ‘definitely or probably’ vote in favour of some form of universal basic income – also known as a citizen’s wage.
In the Netherlands, the cities of Utrecht, Tilburg and Nijmegen are among those planning basic income experiments this year under several different conditions. In Utrecht, the Know What Works scheme will see several test groups get basic monthly incomes of €970 (£825), some with an obligation to seek work and others unconditionally, whether or not they secure employment. A third group will get an extra €125 (£106) providing they volunteer for community service.
Some of the poorest families in the Italian city of Livorno have been receiving a basic income of just over €500 (£425) a month since June 2016, and a further 100 families will be included from this month. In Canada, Ontario is poised to launch a C$25m (£15m) basic income pilot project this spring. While in Scotland, councils in Fife and Glasgow are currently considering trial schemes to launch in 2017, which would make them the first parts of the UK to experiment with universal basic income. The UK’s Green party also supports the idea of a basic income.
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