Finland has embarked on an experiment that will provide a guaranteed income to all its 2000 participants and the money will keep rolling in regardless of whether or not those who benefit are employed or not.
The experiment will start this January and aims to establish a “universal basic income” with those randomly chosen to participate collecting $587 per month.
Believing that a universal income will provide the labour force with increased security, particularly as technological improvements have reduced the need for human workers. It will also enable the unemployed to do occasional work without compromising their benefits.
The program will initially last for two years and although selected at random, participants are currently in receipt of some kind of unemployment benefit or income subsidy. The monthly compensation they will receive is completely tax-free.
With Finland’s intricate and expensive welfare system, the government believes that the program could be financially viable in the long term.
In Finland, as in other countries with welfare benefits, jobless workers can shy away from part-time jobs or occasional work as they could lose their unemployment benefits. The success of the program could result in more jobless Finns taking occasional work or worrying less about underemployment as they will still have their guaranteed payments.
Finland is not the first to introduce such a program. Livorno in Italy already started implementing a guaranteed basic income scheme back in June of 2016, with the city’s 100 poorest families as the initial recipients, receiving $525 a month.
Implementation of a basic income scheme is also being considered in other countries.
Last year in Switzerland a referendum was held to consider giving every Swiss adult a guaranteed income of $2,500 per month. The plan was wholeheartedly rejected with more than 75 percent of voters voting against the scheme.
In the United States, off the back of the state’s massive oil revenue, Alaska has been paying cash dividends annually to all its citizens since the 80’s and could be regarded as the best model of a guaranteed income program.
An advocate group for universal income suggests that Alaska truly has the first “genuine universal income system.”