This month, Finland became the first country to implement a basic income plan for some of their unemployed citizens. The program is aimed at motivating the unemployed to look for work. In addition, proponents of the program hope that it will help the economy adjust to changes in the labor market caused by automation.
If it works, Finland’s basic income plan could reshape and simplify the country’s social security system. It also has the potential to change the way citizens and governments around the globe think of unemployment and assistance.
How the Plan Works
This month, Finland will kick off a basic income program which will give 2,000 randomly selected unemployed citizens a guaranteed income of about 560 Euros (that’s about $587) a month, regardless of whether they work or not. Participants will keep the income, even if they take occasional or full-time work. Ideally, this will encourage participants to look for jobs, since they won’t be risking losing benefits when they’re hired.
The new part? The unqualified, unconditional nature of the support.
“For someone receiving a basic income, there are no repercussions if they work a few days or a couple of weeks,” Marjukka Turunen, of Kela’s legal affairs unit (Finland’s social security), told the Guardian. “Working and self-employment are worthwhile no matter what.”
The Finnish government will study the impact of the plan during 2017 and 2018. If it’s successful, the government could expand the plan to include all adult citizens of the country.
The First Large-Scale Basic Income Experiment
Finland’s basic income program has some economists pretty excited.
“…I expect more of those on this benefit to work more hours than those on the traditional benefit system,” wrote Tim Worstall at Forbes. “That is, I expect us to be able to prove that high marginal taxation rates are a disincentive to work for the poor just as much as they are for the rich. This is something I believe to be true right now but it would be nice to be able to wave the evidence around.”
Many have talked about the potential for universal basic income in a future economy devastated by automation. So far, however, plans like these have only been tested on smaller scales. Finland’s plan will give economists in countries around the world the opportunity to see what happens when citizens are provided with a basic income without stipulation, whether they work or not.
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