Business

No new jobs but happier citizens in Finland's basic income test

Wednesday, February 13, 2019

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HELSINKI, Finland (AFP) — A groundbreaking trial providing a guaranteed basic monthly income to 2,000 jobless people has led to improved well-being but has failed to boost employment, Finnish authorities announced on Friday.

Last December the Nordic nation concluded a two-year experiment in which a randomly selected group of unemployed people were paid an unconditional, tax-free 560 euros (US$634) a month.

Researchers studied whether the no strings attached income could better incentivise jobless people to find work more than traditional unemployment benefits, which may be docked as soon as the recipient starts earning money.

Although the widest such study to be conducted in recent years in Europe, the Finnish trial was limited to participants who were already unemployed.

Proponents of a true “universal income” call for a monthly payment, sometimes described as a citizens' wage, to be given to everyone regardless of their wealth, family or work situation.

Nevertheless, Finnish researchers believe their findings provide important insights for reforming the country's system of welfare payments.

“The recipients of a basic income had less stress symptoms as well as less difficulties to concentrate, and less health problems than the control group,” Minna Ylikanno, lead researcher at Finland's welfare authority Kela, said in a statement.

“They were also more confident in their future and in their ability to influence societal issues,” she added.

Results at this stage are preliminary and relate only to the first year of the study, meaning Friday's findings are far from conclusive.

Additionally, a hoped-for stiumulus to levels of employment has not yet materialised, the project's researchers said.

“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.

Finland's social affairs minister, Pirkko Mattila, conceded on Friday that the Government has no plans to roll out the scheme across the whole country.

“Even though the basic income model developed for the experiment is not likely to be adopted as such for more extensive use, I think the experiment was very successful,” Mattila said in a statement.

“We can use the data from the experiment to redesign our social security system; that is going to be the next major reform.”

Similar schemes have been trialled in Canada and Kenya.

The experiment has not been without its detractors. Finnish trade unions have called instead for employers to pay living wages that do not need to be subsidised by benefits.

The Paris-based Organisation for Economic Cooperation and Development has claimed that a basic income programme in Finland would not be economically viable and could leave significant numbers of people in worse poverty than now.

In 2017, Swiss voters rejected a proposed universal income in a referendum after critics slammed the idea as rewarding the lazy and the feckless.


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