Humans

Finland is killing its experiment with basic income


Since the beginning of last year, 2,000 Finns have been getting money from the government each month — and they are not expected to do anything in return. The participants, ages 25 to 58, are all unemployed and were selected at random by Kela, Finland’s social-security institution.

 

Instead of unemployment benefits, the participants now receive €560 ($690) a month, tax-free. Should they find a job during the two-year trial, they still get to keep the money.

While the project has been praised internationally for being at the cutting edge of social welfare, back in Finland, decision-makers are pulling the brakes and taking the project in a whole new direction.

“Right now, the government is making changes that are taking the system further away from a basic income,” Miska Simanainen, a Kela researcher, told the Swedish newspaper Svenska Dagbladet.

The initial plan was for the experiment to expand in early 2018 to include workers as well as people who are not working, but that did not happen, to the disappointment of researchers at Kela.

Researchers say that without workers in the project, they’re unable to study whether the so-called basic income would allow people to make new career moves or enter training or education. 

“Two years is too short a time frame to be able to draw extensive conclusions from such a vast experiment,” Olli Kangas, a professor who’s one of the experts behind the basic-income trial, told Finland’s public-service broadcaster YLE. “We ought to have been given additional time and more money to achieve reliable results.”

 

In recent years, an increasing number of tech entrepreneurs have endorsed universal basic income, a system in which people receive a standard amount of money simply for being alive.

Entrepreneurs who have expressed support for universal basic income include Elon Musk, the CEO of Tesla and SpaceX, Chris Hughes, a Facebook cofounder, and Ray Kurzweil, Google’s futurist and engineering director.

These tech moguls say that universal basic income in combination with other methods of combating poverty could also help solve the problem of increased automation in the workforce — a problem critics say they have been very much a part of creating.

At the 2018 TED conference, Kurzweil made a bold prediction about the future of “free” money, saying that universal basic income will have spread worldwide by the 2030s and that we’ll be able to “live very well on that.”

But contrary to universal basic income, which advocates say should apply to all citizens regardless of background, Finland’s trial is targeting people in long-term unemployment.

The Finnish government argued that existing unemployment benefits were so high and the system so rigid that a person who was unemployed might choose not to take a job because they would risk losing money — the higher your earnings, the lower your social benefits. The basic-income trial was designed as an incentive for people to start working.

 

But last December, the Finnish Parliament passed a bill to take the country’s welfare system in quite the opposite direction. The new “activation model” law requires job seekers to work a minimum of 18 hours or enter a training program within three months and stipulates that if they don’t manage to find a job, they lose some of their benefits.

And Petteri Orpo, Finland’s finance minister, already has plans for a new project once the basic-income pilot concludes this December.

“When the basic-income experiment ends this year, we should launch a universal credit trial,” Orpo told the Finnish newspaper Hufvudstadsbladet, referring to a system similar to the one in the UK, which collects several different benefits and tax credits into one account.

Official findings from Finland’s basic-income experiment could be published as early as next year.

This article was originally published by Business Insider.

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