Finland’s “Universal Basic Income” means anyone, regardless of their status, receives €560 each month from the government. It’s essentially free money. But some say the pilot scheme, far from de-incentivising people, is encouraging them to work, and it’s caught the attention of economists and politicians worldwide.
We all know that the Nordic countries have incredibly benevolent welfare states. But for nearly a year the Finnish government has been even more benevolent than usual, giving its population what it calls a “basic income”, and what most Finns simply call “free money”.
€560 is paid into the bank accounts of each of the 2,000 people taking part in the pilot scheme (for the moment it is only that), regardless of whether they are out of work, looking for work, in work or retiring from work. Everyone gets the money and everyone can spend it exactly as they please. And those who are unemployed don’t even have to show that they are in the process of looking for work.
Not surprisingly, introducing the scheme has not exactly been plain-sailing. There have been constant calls that call the scheme clearly de-incentivising for those looking for work, but, as supporters of the scheme are quick to point out, if you do find work, you continue to receive the payments, so it is no different, perhaps even better, than just receiving unemployment benefits when you can’t be bothered to find work, as was the case in the old system.
Unsurprisingly too, there have been repeated calls, most prominently from Finland’s largest union, SAK, of which over a fifth of Finns are a member, that says the scheme is unaffordable. Its leader, Ilkka Kaukoranta says the scheme is “impossibly expensive” and “would increase the government deficit by around 5 per cent”.
“The scheme is impossibly expensive and would increase the government deficit by around 5 per cent” – Ilkka Kaukoranta
But those 2,000 people taking part in the scheme have generally responded positively about it. Juha Jarvinen, an unemployed entrepreneur from western Finland says that far from de-incentivising him from finding work, receiving the money actually encouraged him to find a job. Previously he had to work part time to help look after his young children, and would happily continue working part time only to do so now the children are older would jeopardise his welfare payments, so it makes more sense for him to start a new business and work full time with the help of the basic income.
And, despite the criticism, Finland’s experiment is drawing attention in other corners of the globe. The government of Ontario began trialling the scheme in March 2017 to, as its premier says “address new challenges”, and Utrecht’s council is doing the same in the Netherlands. The idea has also been thrown around by prominent figures ranging from hard-left senator Bernie Sanders to the plutocrat Mark Zuckerberg.
Sadly, though, the Finnish government refuses to release any results until the end of this year, and there have been worries that since the original sample size was cut by a fifth the results will no longer be accurate, so all we have at the moment is the testimonies of those who have taken part. But if Juha is to be believed, as well as those places who have followed Finland lead to trial the project, it may only be a matter of time before “Universal Basic Income” really does become universal. In Finland at least.