Finland has just launched a world-first universal basic income experiment
It’s finally happening.
It looks like 2,000 citizens in Finland will welcome the new year with outstretched arms.
These Finns are the lucky recipients of a guaranteed income beginning this year, as the country’s government finally rolls out its universal basic income (UBI) trial run.
UBI is a potential source of income that could one day be available to all adult citizens, regardless of income, wealth, or employment status.
This pioneering UBI program was launched by the federal social security institution, Kela. It will give out €560 (US$587) a month, tax free, to 2,000 Finns that were randomly selected.
The only requirement was that they had to be already receiving unemployment benefits or an income subsidy.
The program allows unemployed Finns to not lose their benefits, even when they try out odd jobs.
“Incidental earnings do not reduce the basic income, so working and … self-employment are worthwhile no matter what,” says Marjukka Turunen, legal unit head at Kela.
If successful, the program could be extended to include all adult Finns.
“Its purpose is to reduce the work involved in applying for subsidies, as well as free up time and resources for other activities, such as making or applying for work,” according to a press release by Kela.
Furthermore, the Finnish government, as well as UBI advocates, may see how this program can end up saving more money for Finland in the long run – as it is less costly than maintaining social welfare services for the unemployed.
“Some people think basic income will solve every problem under the sun, and some people think it’s from the hand of Satan and will destroy our work ethic,” said Olli Kangas, who oversees research at Kela, about the program.
“I’m hoping we can create some knowledge on this issue.”
Then, of course, there is the looming issue of job loss due to automation. Many UBI proponents, including tech entrepreneurs Elon Musk (Tesla and SpaceX) and Sam Altman (Y Combinator), see the program as the only solution to the problem.
UBI is, without a doubt, controversial. There is an ongoing debate as to whether or not it’s a workable system. Of course, the only real way to definitively find out is to put the system to the test – hence, Finland’s experiment.
After its two-year run, the government will have enough data – from the 2,000 participants and a control group of about 173,000 non-participants from the same background – to see just how effective a UBI program could be.
Finland is just one of several governments considering a UBI trial in 2017. Also set for a trial this month is the city of Utrecht in the Netherlands – with Canada and Uganda also preparing their own programs.