Groundbreaking Basic Income trial to take place in Finland

Posted on Jan 4th, 2017 | News and opinion

Groundbreaking Basic Income trial to take place in Finland, image of the Finnish flag

2000 to 3000 unemployed folks in Finland will have at least one reason to be cheerful this month, as they will become part of a two-year study into the benefits of the Universal Basic Income (UBI). The randomly selected candidates will receive a monthly tax-free income of roughly £476 from the state, even continuing once they find work.

By replacing the candidates’ existing benefits, the Finnish government is looking to assess whether a basic income ‘can help reduce poverty, social exclusion, and bureaucracy, while increasing the employment rate’. This marks the only instance when a country has ever trialled the policy at a national level, although cities such as Fife, Glasgow, Utrecht, and Ontario also set to run similar trials in 2017.

The current landscape

Critics of the UBI have described it as unaffordable, and with cuts being made to public services across the UK, selling the idea to the voting public of giving unconditional money to everyone is a particularly tricky task. A recent referendum in Switzerland saw proposals emphatically shot down, with 77% of voters deciding against them.

Despite this, Royal Society of Arts (RSA) have published optimistic UK-based calculations and maintain that UBI is “feasible, desirable and beneficial”, and it has attracted the interest of high-level politicians including Shadow Chancellor John McDonnell. The Green Party have long called for more research into it as well.

Although sometimes disregarded as a flagrantly left-wing idea, there is some curiosity on the other end of the spectrum, as many on the right believe claimants are currently reluctant to find work as in many cases they can end up in a worse financial situation once their benefits end. As unlikely as it sounds, there were allegedly even moves to implement a version of the policy in the US in the Nixon years, although they were eventually quashed.

Whatever your political alignment though, it is hard to deny that the need to rethink welfare and unemployment benefits rises dramatically with employees quickly being replaced by robots. As Joel Mokyr, History & Economics Professor at Northwestern University warned of automation destroying the economy:

“It’s not yet a central item on the agenda of the economics professionals or politicians, and that is what you’d expect, because usually we don’t realise we’re in a crisis until it’s too late to do anything about it”.

Universal Basic Income – a global talking point

These upcoming trials will hopefully offer a welcome injection of evidence-based analysis to the previously anecdote-dominated discussion. It may end up being a massive flop, or a resounding success, but either way the results will most likely provide some much-needed insight into how the details can be tweaked and improved to produce better results.

Although it is not truly universal (it only covers 0.5% of the population and is limited by age, employment and income), MPs and policy wonks across the globe will nonetheless be keeping a close eye on this potentially hugely significant study.

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Written by Tom West

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