Basic income pilots have arrived. Finland is one of many jurisdictions set to launch an experimental basic income program that is being referred to as the “greatest societal transformation of our time.”
The Social Insurance Institution of Finland, otherwise known as Kela, will initiate a test in the coming months that would see approximately 2,000 randomly-selected welfare recipients receive about $1,000 a month. It would be tax-free and mandatory for those who are selected.
Finnish authorities confirmed that the pilot program will only be for a select few and not the entire population. The people picked will not include students or old-age pension retirees.
In order to assess and monitor the effects of a basic income, the required participants will be compared to a control group. The level of the smallest basic income to be tested will correspond with the amount of the labor market subsidy and basic daily allowance.
“The objective of the legislative proposal is to carry out a basic income experiment in order to assess whether basic income can be used to reform social security, specifically to reduce incentive traps relating to working,” the Social Affairs and Health Ministry said in a statement.
Last year, Finland announced that it was considering end its welfare system and replace it with a basic income fund. Since the Scandinavian country has had a difficult time maintaining and paying for its current welfare system, officials think they should just give everyone a monthly benefit regardless of income or employment status. Observers say that Finland’s welfare program is one of the most generous in all of Europe, but it is quite costly for the government. This is why authorities say the basic income program’s estimated $56 billion will be a lot cheaper than the current system.
As we have previously reported, the basic income concept is being tried out by a handful of jurisdictions all over the world.
The province of Ontario is set to launch a pilot program. The Liberal Party of Canada and Prime Minister Justin Trudeau have pledged to look into the matter. A small number of people in Switzerland keep trying to have the government implement the idea, though a strong majority of citizens are against it. New Zealand is also mulling over the initiative.
Proponents of basic income say that it’s necessary because the cost of living keeps going up and that employment opportunities do not offer enough compensation. They also argue that it would help maintain a healthy work-life balance. Moreover, they believe basic income is a perfect defense mechanism from robots taking over the workplace.
Opponents say that no one should be given money just for breathing (See: Basic Income Guarantee: A disastrous policy that’s gaining traction worldwide). In addition, it would remove the incentive to work harder or even work at all. One Swiss supporter of the program said that he wants to focus on his passion and relax more instead of working all the time (SEE: Swiss voters overwhelmingly reject basic income guarantee (again)).
Another thing to be concerned about is the cost of program because it’s quite likely that governments won’t eliminate the entire welfare state with a minimum income. Of course, a place like the United States could never afford such a system with its massive debt levels and unfunded liabilities.
Lastly, and this may seem counterintuitive to some, it will just expand poverty. It will discourage people from breaking their shackles to the government. Welfare checks already have an effect on someone’s desire for employment. The best way to reduce poverty is sound money, an end to the minimum wage, an employable skill in demand and the prevention of price inflation.
Basic income, though it has garnered support from individuals of all political persuasions, is a failed concept. Unions won’t allow it, it will be too expensive to adopt and the economy would go into shambles.
“… and mandatory for those who are selected.”
Mandatory. I am seriously attempting to grasp this. Surely, those paying the taxes to fund the Finnish government in all its schemes — they are under the mandatory thumb.
But just an ordinary Teemu,walking along, suddenly the government seizes him and orders him to receive the money every month. He screams and attempts to squirm out of it.
Finnish policeman: “It’s the law. Now shut up and take the dough.”