Why Finland’s Basic Income Experiment Isn’t Working

[Tennis]

https://www.nytimes.com/2017/07/20/o...ic-income.html

HELSINKI, Finland — Universal basic income is generating considerable interest these days, from Bernie Sanders, who says he is “absolutely sympathetic” to the idea, to Mark Zuckerberg, Facebook’s chief executive, and other tech billionaires. The basic idea behind it is that handing out unconditional cash to all citizens, employed or not, would help reduce poverty and inequality, and increase individual liberty.

This discussion is still largely theoretical, though, because universal basic income hasn’t been rigorously tested. Most experiments — in the United States in the 1970s; in the Dutch city of Utrecht today — have been local and based on small sample sizes. A nonprofit organization has run a larger program in Kenya. But that effort, which is aimed at decreasing poverty in a poor country, has little bearing for advanced economies and lacks the rigor of a state-mandated nationwide program.

This is why eyes turned to Finland at the beginning of the year, when the government initiated a national test run for universal basic income. As a rich country in the European Union, with one of the highest rates of social spending in the world, Finland seemed like an ideal testing ground for a state-of-the-art social welfare experiment.

In reality, the Finnish trial was poorly designed, and is little more than a publicity stunt.

Kela, the national social-insurance institute, randomly selected 2,000 Finns between 25 and 58 years of age who were already getting some form of unemployment benefits. The subsidies were offered to people who had been unemployed for about one year or more, or who had less than six months of work experience. Participants in the trial would receive €560 (about $645) a month from January 2017 to December 2018, whether or not they came to earn any additional income.

The trial size was cut to one-fifth of what had originally been proposed, and is now too small to be scientifically viable. Instead of giving free money to everyone, the experiment is handing out, in effect, a form of unconditional unemployment benefits. In other words, there is nothing universal about this version of universal basic income.

And so even when the experiment’s official results are known, in 2019, they will reveal little — and far less than they could have — about the effects that universal cash payments could have on income inequality or people’s attitudes toward work and their quality of life.

The shortcomings of Finland’s universal basic income experiment are best understood against the backdrop of the country’s lackluster economic performance and the resulting political developments. At the time of the 2015 parliamentary election, the Finnish labor market had experienced three recessions since the 2008 financial crisis. The public debt level increased from more than 38 percent of G.D.P. in 2008 to 75 percent in 2015.

An article in The Economist last month quoted Olli Kangas, who helped design the Finnish program and coordinates it for Kela, complaining about the politicians’ lack of follow-through with the trial. He compared them to “small boys with toy cars who become bored and move on.”

A second, expanded experiment was supposed to start in early 2018, but there are signs — like silence — that the government may renege on that plan. The universal basic income program in Finland is being whittled down before it even properly begins.

So what can we learn from all of this so far? How not to conduct a trial of this kind. Universal basic income can only succeed if the effort is sustained and widespread — and not available only to the unemployed. The program should not be intended to force people into low-paying jobs.

The Finnish government has a chance to correct its course. It should expand the trial in early 2018, as originally planned, and steer it back to its original ideals: a bold experiment to collect hard data about how a much-debated idea actually works in practice. Only that would honor Finland’s tradition of experimenting with innovative social policies.

So from the looks of things it's not that universal income is flawed but rather the implementation is terrible. It still makes you wonder about having a % of society just enjoying a paycheck for doing nothing.

Do you support universal income and would you like to see your country roll out similar plans?

[kasuke06]

maybe once we have automation replacing significant numbers of low/no-skilled jobs. Until then, sorry, but you'll have to work for a living just like everyone else.

[Independent voter]

Smelly hippies describing their basic income experiment in Oakland California a city with very poor minority neighbors along side some rich silicon valley types.

It's ran by ycombinator a company that helps launch a lot of silicon valley startups, ycombinator has lots and lots and lots of money.

They are starting very small, a pilot program but they plan on expanding it in the future.

[Flurryfang]

I like the idea of basic income I don't know how it would be implemented, but i would gladly give up some % of my income to keep people off the streets. It could proberly also be used to keep people busy

[Fugus]

maybe once we have automation replacing significant numbers of low/no-skilled jobs. Until then, sorry, but you'll have to work for a living just like everyone else.

And until they do something to ensure that employment is spread around to the work force and at wages that the people can survive, working for a living isn't really a viable option either for a huge portion of the population and growing which is why the idea of a UBI is taking up steam so quickly nowadays anyways.

[cubby]

https://www.nytimes.com/2017/07/20/o...ic-income.html




So from the looks of things it's not that universal income is flawed but rather the implementation is terrible. It still makes you wonder about having a % of society just enjoying a paycheck for doing nothing.

Do you support universal income and would you like to see your country roll out similar plans?

It's too bad that the experiment won't be scientifically viable - I was curious how it would come out. Even though practically speaking it would never really be a viable experiment, regardless of the numbers of people participating in Finland. It would lead to some interesting data, though.

To answer your question, yes, I would like to see UBI rolled out. I think it would be amazing if people didn't have to work for a living, only if they wanted too (i.e. pursue more income or satisfaction or fulfillment) - but that's an entirely different society than we live in now. And won't be practical until far after we see ubiquitous automation for 90%+ of our services.

Will be nice when (if) it happens, though.

[Endus]

And until they do something to ensure that employment is spread around to the work force and at wages that the people can survive, working for a living isn't really a viable option either for a huge portion of the population and growing which is why the idea of a UBI is taking up steam so quickly nowadays anyways.

That's probably the best argument for it.

Is a proper basic income system simple? No. It pretty much can't be.

Is it more simple than a host of overlapping social support systems that require application and qualification processes and operate on different month-to-month income levels, combined with the complexity of administering all the necessary worker wage protections such as minimum wages and so forth? Almost definitely. Especially since a working model would be resilient to economic shifts in ways the current systems largely are not; a major recession can tank employment numbers, driving up the numbers needing support, but there would be no such bump with a UBI.

[kasuke06]

And until they do something to ensure that employment is spread around to the work force and at wages that the people can survive, working for a living isn't really a viable option either for a huge portion of the population and growing which is why the idea of a UBI is taking up steam so quickly nowadays anyways.

McD's stopped hiring? Walmart's out of jobs? People no longer need things cleaned/lawns mowed/ etc? It's less an issue of people being unable to find work, it's people being unable to find work they want to do.

My first job was cleaning out the neighbors dog runs every day after school. I'm pretty sure I cleaned up more than my weight in dog shit that summer.

[Endus]

McD's stopped hiring? Walmart's out of jobs? People no longer need things cleaned/lawns mowed/ etc? It's less an issue of people being unable to find work, it's people being unable to find work they want to do.

My first job was cleaning out the neighbors dog runs every day after school. I'm pretty sure I cleaned up more than my weight in dog shit that summer.

There are not enough jobs for everyone who wants one to have one. That's a simple mathematical fact.

[Molis]

Until there is a way to ensure people do not take advantage of it, or until they offer me my current salary for which I worked my ass off to get....then no

[Fugus]

That's probably the best argument for it.

Is a proper basic income system simple? No. It pretty much can't be.

Is it more simple than a host of overlapping social support systems that require application and qualification processes and operate on different month-to-month income levels, combined with the complexity of administering all the necessary worker wage protections such as minimum wages and so forth? Almost definitely. Especially since a working model would be resilient to economic shifts in ways the current systems largely are not; a major recession can tank employment numbers, driving up the numbers needing support, but there would be no such bump with a UBI.

Oh yeah, I see it like this. By itself, it could remove social security, food stamps and a host of other programs and all the overhead associated with them. And if you could combine that with a Universal Healthcare system could remove Medicare, Medicaid, Tricare and good knows how much more and that associated overhead.

That would have huge benefits across the board from actually allowing labor to negotiate with employers on more even footing even without a union as they have the legit option of walking away if the terms aren't to their liking and allowing people to look for work without falling into the welfare gap where they lose money if they try. As an aside from another thread I saw on here, would allow prisoners a start at life where even if they can't find work when they get out for a while, they can try and improve themselves and prove themselves without being forced to go back to the old life to survive. All that while allowing people to survive even if they lose their jobs or they try and start a business of their own and it goes under without losing it all so they can try again.

The big issues I see is they would have to do some pricing controls on homes and other nessissities or I foresee those markets adjusting to eat everything a UBI gave because they could and would defeat the purpose and benefit of a UBI.

[Deleted]

I'll support it when a) shitty jobs are completely automated and many people simply won't be able to find jobs period and b) the border's a heavily militarized zone where people trying to come here illegally are apprehended or shot.

[Fugus]

McD's stopped hiring? Walmart's out of jobs? People no longer need things cleaned/lawns mowed/ etc? It's less an issue of people being unable to find work, it's people being unable to find work they want to do.

My first job was cleaning out the neighbors dog runs every day after school. I'm pretty sure I cleaned up more than my weight in dog shit that summer.

McD's hires at living wages? Walmart hires at living wages and hours? There are enough jobs available at living wages to employ the citizens of the nation at livable levels without relying on government aid?

It is less of an issue of people being unable to find work they want to do, it's people unable to find jobs at living wages and hours.

Congrats on your first job, completely irrelevant to the discussion though as if that job was available and paid living wages, people would be lined up around the block to clean that dog shit too. And I doubt you were supporting yourself off that job.

[Doctor Funkenstein]

I like the idea of basic income

It's an absolutely idiotic idea.

Whatever the "free money" is, it will eventually equalize to being the value of 0 over time. That's just how economies work. If everyone has or gets X for free, then X becomes all but worthless and either inflation runs rampant, or Y -- which very few people has -- eventually replaces X. And when X is money, it all eventually gets funneled to Z who hoards it even more where it means absolutely nothing to Z yet remains in their possession indefinitely. Which has already happened for the most part.

[Yvaelle]

https://www.nytimes.com/2017/07/20/o...ic-income.html




So from the looks of things it's not that universal income is flawed but rather the implementation is terrible. It still makes you wonder about having a % of society just enjoying a paycheck for doing nothing.

Finland hasn't seen an increase in unemployment after implementing their UBI, so this is clearly not how this works. In reality, people gain a universal basic income and continue to work for additional income, because living a minimal existence is pretty shitty.

[Fugus]

It's an absolutely idiotic idea.

Whatever the "free money" is, it will eventually equalize to being the value of 0 over time. That's just how economies work. If everyone has or gets X for free, then X becomes all but worthless and either inflation runs rampant, or Y -- which very few people has -- eventually replaces X.

Or they have price controls on stuff like housing and other needed stuff so they can't inflate it away and it is adjusted annually to keep up with inflation. Luxury crap going up in price won't be an issue as the people can say fuck that and get cheaper shit or do without. Rent or House Payments going up or the price of medicine or transportation going up when you are in areas where you are required to have them to survive is the thing you have to control for.

Without those price controls on necessities though, yeah, they would increase to eat it all because they could and people would have no choice but to pay it to survive.

[Yvaelle]

Have you heard of charity? It's been around for a very long time and you don't even have to force everyone else to donate just because you want to.

It's not an effective means of stimulating an economy, or running a society, nor does it address the ethical questions UBI is designed to resolve, nor does it eliminate the government complexity of other support programs that UBI replaces.

[Fugus]

Yup. Clearly everyone is incapable of caring for themselves and dropping like flies. I guess all those people I get stuck behind in rush hour traffic are just headed to the forest to forage for berries. IT'S FUCKING CHAOS OUT THERE!

Well we do have something like an estimated 45,000 per year who die due to lack of healthcare, we have plenty who die every year to homelessness (can't find this metric so feel free to bash it).

But the economics of the US speak for itself with how many are on government aid to survive while working and how much negotiating power they have when it comes to their wages and how they are doing financially as a whole.

Your sarcasm is noted though.

[Findlyn]

McD's stopped hiring? Walmart's out of jobs? People no longer need things cleaned/lawns mowed/ etc? It's less an issue of people being unable to find work, it's people being unable to find work they want to do.

My first job was cleaning out the neighbors dog runs every day after school. I'm pretty sure I cleaned up more than my weight in dog shit that summer.

and the fact it was a summer job implies that you were a kid doing a job for the summer between school. Also, that if you were making enough money, you were already in a good enough area that your neighbors could afford someone to do this.

Also the jobs you listed above, even if you somehow managed to find a position at those places that let you work a full 36-40 hours a week, that still isnt enough to live on. Just look up the highly infamous McD's list they sent out to workers on how to spend money to survive. Not only did it include working 2 full time jobs, but you also didn't have things like heat in the winter, gas for your car, somehow only paying $20 a month for insurance, and a whole bunch of other BS.

[Daedius]

We will be needing a universal income eventually. Automation in all job sectors will happen, unemployment will skyrocket. How do the rich expect to remain rich if no one can afford their products?