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Finland Testing Universal Basic Income for Select Unemployed

January 3, 2017 by Brett Wilkins in Europe, Rich & Poor with 0 Comments

A street in Helsinki, Finland. (Photo: Flickr Creative Commons)

Finland has become the first nation to pay some of its unemployed citizens an unconditional monthly universal basic income (UBI), a benefit that continues even after they find work.

Deutsche Welle reports beginning this month some 2,000 unemployed Finns will receive monthly payments of €560 ($584) with no strings attached. Recipients will pay no tax on the UBI, and the tax-free payments will continue even after they find jobs. They will be randomly chosen from a pool of 25-58 year-olds who received government unemployment benefits in November 2016.

Marjukka Turunen, head of legal affairs for Kela, the Finnish social insurance agency, told DW UBI “gives people financial security.”

“They can count on the fact that the money will be there on time,” Turunen said. “What they do with it is up to them.”

Dismissing critics who claim UBI will encourage laziness, Turunen countered that “this could be a big incentive for people to take on at least part-time work.” While this may seem counterintuitive, under the current unemployment benefits regime, some out-of-work Finns hesitate to seek new jobs because they fear they will be worse off than before after taxes.

Other nations will be closely watching Finland’s social experiment. Last year, voters in Switzerland rejected a measure that would have paid all adults a 2,500CHF ($2,435) monthly UBI. Only 23 percent of Swiss voters favored the proposal. However, Scotland is deciding whether to test a UBI scheme in Glasgow and Fife later this year.

“If there is ever a case to be made then you need to test it in a place like Glasgow, with the sheer numbers and levels of wealth inequality,” Glasgow Councilor Matt Kerr told The Guardian. “If you can make it work here then it can work anywhere.”

However, critics around the world argue UBI is a disincentive to finding employment and eventual social mobility. “We should not advance a policy that is premised on giving up on the possibility of workers’ remaining employed,” Jason Furman, the Obama administration’s chief economist, said last summer.

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