With high-profile champions such as Richard Branson, Facebook boss Mark Zuckerberg, and Tesla CEO Elon Musk, backing the idea of governments giving non-working people money (from working people) to do nothing – what could go wrong?
Well, two years after enthusiastically beginning its experiment with a universal basic income – in which people are paid an unconditional salary by the state instead of benefits – Finland is abandoning the project as government enthusiasm wanes and additional funding requests are rejected.
As a reminder, The Telegraph explains Universal basic income is a form of cash payment given to individuals, without means testing or work requirements. In some models this is at a rate sufficient to cover all living expenses.
Proponents argue that:
- The lack of expensive means-testing leads to a higher proportion of the budget going to recipients. This would be more efficient
- The transparency of universal payments would drastically reduce the need to detect benefits fraud
- One scheme could replace the current complex arrangement of government benefits, rebates and tax rebates
- Work will always benefit recipients of this welfare, rather than the ‘benefits trap’ that leaves part-time workers
Critics argue that:
- Universal income may be inflationary and, in attempting to move all individuals out of poverty, it may simply raise the level of the poverty line
- It may reduce the incentive to work and studies have found some evidence to support this.
- A reduction in taxable income would reduce the government’s ability to cover other expenses, such as healthcare
Universal income as a policy dates from at least Thomas Paine’s 1795 Agrarian Justice. It is currently more closely aligned with left-wing politics, where it would be funded through income from nationalised assets.
Several countries have experimented with a universal basic income, including Finland, Canada, Kenya and the Netherlands.
And now Finland has killed the plan… (via The Guardian)
Since January 2017, a random sample of 2,000 unemployed people aged 25 to 58 have been paid a monthly €560 (£475) , with no requirement to seek or accept employment. Any recipients who took a job continued to receive the same amount.
Furthermore, the government has also imposed stricter benefits plans, introducing legislation making some benefits for unemployed people contingent on taking training or working at least 18 hours in three months.
“The government is making changes taking the system away from basic income,” Kela’s Miska Simanainen told the Swedish newspaper Svenska Dagbladet.