Finland’s basic income program made people happier, but left them jobless
The BBC recently reported on the results of Finland’s new basic income program.
For one year, 2,000 randomly selected unemployed people were given an unconditional monthly basic income of $685 US dollars. The program was created by the Social Insurance Institution (Kela), which is a Finnish government agency.
The aim was to see if a safety net could help people find better work
The aim of the program was to see if a safety net would help people find work, or if it would support them if their main source of income was from insecure gig economy jobs. Researchers at the Kela told the BBC that the government wanted “to see if it would be a way of reforming the social security system.”
Those who argue for a basic, guaranteed income say that such a safety net can help people get out of poverty by providing them with time to get necessary training for a better career.
The results of the program were that although unemployment among this group did not decrease, recipients reported feeling happier and less stressed.
The centre-right government that put the policy into place had hoped that within a year, a significantly number of the recipients would be employed compared to a control group that did not receive the income.
That was not the case. One recipient, a former newspaper editor, told BBC that “I am still without a job, I can’t say that the basic income has changed a lot in my life. OK, psychologically yes, but financially – not so much.”
However, Miska Simanainen, a researcher at the Kela, said that he does not consider the project to have “failed.” He told the BBC that “this is not a failure or success – it is a fact, and [gives us] new information that we did not have before this experiment”.
Finland is the first European country to test an unconditional basic income program.
Last year, the newly elected Ford government of Ontario pulled the plug on a basic income pilot project created by the previous Wynne government.
Social Services Minister Lisa McLeod said about the program that “we have a broken social service system. A research project that helps less than 4,000 people is not the answer and provides no hope to nearly two million Ontarians who are trapped in a cycle of poverty.”
Universal basic income
Universal basic income (UBI) has become a hot topic in many Western developed nations, where it appears that automation and advancements in AI might gradually increase unemployment to potentially dangerous levels.
The fear that almost all human labour, including intellectual labour, might be replaced by cheaper and more efficient machines has led some to consider an unconditional basic income program for everyone.
In such a program, everyone would get a monthly income, regardless of their earnings. Like healthcare and education, income would become a right of citizenship.
It’s a simple but radical reform. Interestingly, it often finds support from both sides of the political spectrum.
The idea is not new, however. Twentieth century economists like Milton Friedman and Friedrich Hayek thought that it was the best way for governments to alleviate poverty. Many others hold that the idea would actually be cheaper than current welfare systems, and much easier and less costly to implement.