Tuesday, 23 July, 2019

First look at Finland's basic income trial

Finland's basic income trial fails to spur employment Finland 'free money' trial did not spur unemployed to find work, researchers say
Deanna Wagner | 10 February, 2019, 22:12

The center-right government's original plan was to expand the basic income scheme after two years as it tries to combat unemployment which has been persistently high for years but reached a 10-year low of 6.6 percent in December.

In Finland, the relative high unemployment benefits have reduced the willingness of unemployed to accept work. However, 55 percent of them described their health as good or very good - compared to only 46 percent of the control group.

Finland launched the trial to look into ways to reshape its social security system.

The results of a social experiment in Finland which saw unemployed people paid a basic income by the government has bolstered calls for the scheme to be tested in the United Kingdom as a possible alternative to Universal Credit.

It immediately attracted global interest - but these results have now raised questions about the effectiveness of such schemes.

In such a program, everyone would get a monthly income, regardless of their earnings.

That followed the imposition of benefits sanctions on unemployed people who refused work.

Another popular variation is "universal basic services" - where instead of getting an income, things like education, healthcare and transport are free for all.

The idea is not new, however.

Finland's experiment, the first of its kind on a national level, was implemented by the government of Juha Sipila, the country's first millionaire prime minister, between 2017 and 2018.

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Moscow had taken a dim view of the name accord, and of Macedonian membership in North Atlantic Treaty Organisation . A majority of 153 lawmakers supported the legislation, while 140 voted against.

Swiss voters rejected a similar scheme in 2016. Adults in a village in western Kenya are being given $22 a month for 12 years, until 2028, while the Italian government is working on introducing a "citizens' income".

The recipients of a basic income were also more confident in their possibilities of finding employment.

The scheme made Finland the first European country to test an unconditional basic income. This is seen as increasingly important in the age of automation, such as when robots take people's jobs.

"The recipients of a basic income were no better or worse than the control group at finding employment in the open labour market", Ohto Kanninen, research coordinator at the Labour Institute for Economic Research, said in a statement.

One participant, former newspaper editor Tuomas, said: "I am still without a job", he explained. "OK, psychologically yes, but financially - not so much". Interestingly, it often finds support from both sides of the political spectrum.

Economics writer Grace Blakely makes this point in the New Socialist, adding that "without fundamental structural reforms to our economic system, UBI will only be a sticking plaster papering over the cracks".

Intuitively, however, it seems right that people who feel secure about even a small income display more optimism and report they're functioning better.

Anthony Painter, director of research and action at social charity the RSA, said the Finnish experiment showed there was a "strong case" for basic income experiments in the UK.

"Mr Simanainen told the broadcaster that despite the results, he does not believe the trial had "failed", rather that it "[gives us] new information that we did not have before this experiment".