Finland basic income trial, People $640 A Month, No Strings Attached.
Tuomas Muraja’s life took an unexpected turn at the end of 2016. He received a letter telling him that he would be getting a monthly sum of €560 ($640) from the Finnish government, no strings attached, for two years.
“It was actually like winning the lottery,” said Muraja, who was one of 2,000 people randomly selected from a pool of 175,000 unemployed Finns, aged 25 to 58, to take part in one of the most prominent universal basic income trials in the world.
Since losing his staff job as a journalist in 2013, Muraja has struggled to find permanent work. Every month he was trying to scramble together money for his rent of about $2,270 from freelance writing gigs, which came sporadically and often paid late. The government’s basic income scheme gave him freedom. He could keep the cash, even if he found work, and he wouldn’t have to contend with the constrictive bureaucracy of Finland’s complex welfare system.
“When you feel free you are creative, and when you are creative you are productive, and that helps the whole of society,” said Muraja, who has written a book about his experiences with the trial.
Finland’s universal basic income test, which cost the government about $22.7 million, was designed and administered by the country’s social insurance agency, Kela. The experiment aimed to help the country assess how to respond to the changing nature of work and ― given its 8-percent unemployment rate at the time ― how to get people back into the labor market.
The trial ended in December. While final results won’t be available until 2020, preliminary results were revealed on Friday.
On employment, the country’s income register showed no significant effects for 2017, the first year of the trial.
The real benefits so far have come in terms of health and well being. The 2,000 participants were surveyed, along with a control group of 5,000. Compared with the control group, those taking part had “clearly fewer problems related to health, stress, mood and concentration,” said Minna Ylikännö, senior researcher at Kela. Results also showed people had more trust in their future and their ability to influence it.
“Constant stress and financial stress for the long term – it’s unbearable. And when we give money to people once a month they know what they are going to get,” said Ylikännö. “It was just €560 a month, but it gives you certainty, and certainty about the future is always a fundamental thing about well being.”
Aware that Finland’s trial is under an international spotlight, Olli Kangas, scientific leader of the scheme and professor at the University of Turku, expressed hope that the experiment not be written off on the basis of preliminary employment results. “The whole truth is much more complex, we need many more studies and research to find out,” said Kangas.
Universal basic income is an idea that’s been swirling around for centuries and has been tried across the world. While it has come to mean many different things, in its purest definition, a universal basic income is granted to everyone, regardless of wealth, income or employment status, on an unconditional basis.
The policy has supporters on both sides of the political spectrum. Those on the left say it will help tackle poverty, reduce yawning inequality and help people fend off the threat of their job being automated. For advocates on the right, UBI is seen as an attractive way to simplify complex systems of welfare payment and reduce the size of government.
Tech billionaires, such as Mark Zuckerberg and Elon Musk, have thrown support behind the idea amid anger over their own extreme wealth. It’s also caught the attention of Rep. Alexandria Ocasio Cortez (D.-N.Y.) who has floated UBI as part of a Green New Deal – the umbrella name for a host of policies to tackle climate change and reduce inequality.
But it’s controversial, too. First, there’s the cost. One estimation by journalist Annie Lowrey, who has written a book on UBI, says a $1,000 monthly payment would cost around $3.9 trillion a year. Other critics see UBI as an expensive, free handout that will discourage work and encourage laziness.
These longstanding tropes of the “lazy” poor hold no water for 31-year-old Tanja Kauhanen, another participant in Finland’s scheme. While the results so far may have shown no improvement in employment, she believes UBI helps people who are struggling. “Think about it. It’s such a carrot to get a job immediately, even if it’s low paid.”
Kauhanen used the money ― and the time freed by no longer having to apply to multiple agencies for welfare benefits ― to take a telemarketing job. Pay was low, but topped up with the basic income, it dramatically changed her quality of life. It helped her finally sort out finances, after years of scouring grocery stores for the cheapest bread, milk and cheese. “I could go to a restaurant and have a normal dinner without thinking that, OK, I am going to have to eat noodles for the rest of the month,” she said.
The end of the scheme was a shock, she said, for everyone who participated in the trial. “We all are in big trouble now to be honest, because what would happen to you if your income decreased by €600?”
She’s still working at her job, but is already running up debt and desperately searching for better-paying work.
The end of Finland’s scheme was also a blow to those who had hoped the trial would be expanded and extended. Politicians “wasted the opportunity of a lifetime to conduct the kind of trial that Finnish social policy experts had done preliminary research for for decades,” said Antti Jauhiainen, a director of the think tank Parecon Finland.
He said the government was never really behind the experiment, because it was “simultaneously pushing for cutting the existing benefits and adding surveillance and control of the unemployed.” The Finnish government has now introduced an “activation model,” which requires unemployed people to complete a minimum of training or work to receive full benefits.
The announcement that Finland had no plans for more UBI schemes followed the cancellation of another UBI trial in Ontario, Canada. That test, launched in April 2017, involved 4,000 people on low incomes who received up to $13,000 a year for individuals, and up to $18,000 for couples, although payments were reduced by 50 cents for every dollar they earned.
The program was axed in 2018, following the election of right-wing politician Doug Ford. The government cited the “extraordinary cost for Ontario taxpayers.” All payments will cease by March.
But there are experiments that are still going. A program in Kenya, for example, run by the charity GiveDirectly, has been giving out unconditional money since 2016 to more than 21,000 people in villages across the country in a trial set to last 12 years. Initial results show a boost to the well being of participants.
And there are others on the horizon. In the U.S., a trial is about to kick off in Stockton, California, that will give $500 a month to 100 low-income families. And in Oakland, the tech incubator Y Combinator intends to start a UBI trial this year that would hand $1,000 a month with no strings attached to 1,000 people across two U.S. states for three years. In India, the main opposition party is running on a pledge to introduce a guaranteed minimum income for the country’s poor.