Finland Begins Universal Basic Income Experiment
Finland has become the latest country to experiment with a limited form of a universal basic income. In two-year trial, the European nation will give 2,000 randomly-selected unemployed citizens a guaranteed basic monthly income of €560 ($587). The trial began on January 1, with the money coming in at the beginning of each month. The funds are being distributed by the federal social security institution Kela.
Finland kicked off the groundbreaking trial in a bid to reduce poverty and increase employment. Unemployment in the country currently stands at around 8.1 percent, or 213,000 out of a population of 5.5 million. The Finnish government first announced a plan to replace earnings-based social insurance benefits with a basic income a little over a year ago.
Finnish authorities are hoping to the plan will help streamline the country’s complex social insurance system. Finland’s residents could be on one of 40 different benefit systems, depending on their specific needs. Each benefit is calculated differently and must be changed when the person’s status changes. The basic income will be deducted from participants’ existing benefits payments.
The benefits are significantly less than a regular income. Finland’s employed citizens earn roughly €3,500 per month in the private sector. However, the payments will continue even after they’ve found work.
The concept of a universal basic income is centuries old. Under the concept, countries provide citizens with money regardless of how much they work. A universal basic income was one of the past year’s most popular theories of how to solve poverty. The idea of a universal basic income has attracted many advocates in the business world, including bond investor Bill Gross and Tesla CEO Elon Musk.
Advocates say the system prevents people from falling through the cracks by providing the money to everyone, regardless of their income status. Advocates claim that the recipients will actually use the money to make their lives better, not as a means to avoid working altogether. Limited evidence from developing countries reinforces this belief.
Finland is not the only place currently experimenting with the idea. Silicon Valley startup incubator Y Combinator announced plans last June to launch a pilot program of unconditional basic income in Oakland, California. Ontario in Canada and Utrecht in Netherlands are also experimenting with a guaranteed income. A US-based NGO in Kenya is currently giving 6,000 individuals a high enough income to cover food, shelter, and healthcare over a 10-year period. Last June, Switzerland rejected a similar proposal for a guaranteed monthly income for every citizen.
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