Euros (AFP).
Switzerland may have voted against the controversial idea of paying all its citizens a guaranteed income, but Finland indicated Thursday it plans to try out a monthly basic payment of 560 euros ($600).
The government said it had chosen the figure for an unconditional basic income in line with a manifesto pledge by centrist Prime Minister Juha Sipila, who took office 15 months ago.
Former businessman Sipila wants to see if the measure can boost employment and simplify the welfare benefits system, and plans to test the idea on a 2,000-strong sample of randomly selected working-age residents.
“The primary goal of the basic income experiment is related to promoting employment,” said the health and social affairs ministry, adding that it also aimed to simplify the complicated benefits system in a sustainable way regarding public finances.
Amid a growing debate on the subject, Finland now wants to be the first European country to test the idea nationwide.
In June, voters in Switzerland decisively rejected a far more generous proposal to pay a monthly 2,500 Swiss francs (2,300 euros/$2,500) to each adult and 625 francs for each child.
The idea has support on the political left and right with the former wanting a guaranteed safety net while some liberal voices feel that money for nothing can dissuade some jobless people from seeking work.
I am seriously envious of any country socialized enough and stable enough to give this a try. I think of how great this would be here in uStates, how it would not only help a vast amount of people, but it would go a very long way in stabilizing people mentally and emotionally, allowing people to ease up on feeling a constancy of anxiety, stress, and anger. That said, I don’t even want to imagine this being proposed in good ol’ Amerikka, we’d all go deaf from the screaming.
Via Raw Story.
Well, you know how it works… The more money businesses and the mega-rich, the better off we are all, because they return that money into the system by buying, investing and so on, and it all trickles down. But give more money to the average Joe, and he’ll just stash it in a secretive offshore bank to avoid paying his due to society, and when he does that, we all lose. You don’t want us to be losers, do you?
Wow -- what an idea! People don’t have to stand in line for hours to try and prove they’re looking for work? Holy cow. And single women would be able to feed their children a healthy diet and clothe them adequately and *buy them diapers*?
We can’t have that! Heads would explode! It would be a disaster! (Yes, that is sarcasm.)
Something like this seems inevitable now. For hundreds of years new technology has made workers more productive, and when the tech displaced workers, it tended to create new jobs with different skill sets. But we are now seeing far too much of the new tech that displaces workers but provides almost no new jobs at all.
Since the 1970’s all of the gains in worker productivity have been stolen by the people who owned the capital despite the workers investing their own resources in education and training for the new productive technology. We could easily afford such a universal income plan by simply taking back some of that stolen money.
But when the robbers control the government…
The level of welfare here is passable, you won’t starve and you can pay the rent. However applying for benefits is navigating in a jungle of bureaucracy (people on welfare must apply for two or three different benefits) and getting a short time job may land you financially worse.
So the universal income is one of the the few policies of the present govt that I support (the other is deregulating the opening hours of shops). It’s a right wing government eager on austerity, lower wages, longer hours and gutting the environmental protection.
All three parties in the government are right wing or conservative or both.
A Basic Income is a splendid idea that cuts the administrative cost of welfare to the minimum. It also, as you suggest, would help people’s mental health, especially poor people’s mental health.
You might like to check out this study http://www.nber.org/papers/w21562.pdf which looked at the long-term effect on some poor families with children when some gained some guaranteed income.
I think Kengi nails it. Automation is making a lot of labor unnecessary. If you can get people their McBurgers with a machine cheaper than by paying someone a wage way too low to live on, you are increasing the wealth of society. Why not just give the former counter workers the money we’ve saved by not having to make them work?
I’m sure the primary reasoning against it is that those lazy bums should get a job, and if we pay everyone a basic income, nobody will work!! Which of course is bull methane. In fact, if you are automatically given enough money that you can afford a livable apartment and car, you have all that free time you used to spend on buses, or waiting for buses that are 30 minutes late, to spend looking for work or working. And every dollar you make adds to your basic income, instead of knowing you’ll lose your benefits if you work too much. I strongly suspect such a system would actually decrease the U6 (people in the workforce with no job) number.
Some things about the Universal income experiment (as it is now known about the plans):
The people chosen will be unemployed. 560 € is about the same sum they would get as unemployment benefits would be without having to apply for them and any income from work which they may find will be just taxed normally, not mostly deducted from unemployment benefits. They will be able to get the all the other benefits which are mostly income/means-tested.
So it’s, mostly a test to see if people will find more work if they actually get more money from it than from not working, don’t have to pay back unemployment benefits due to slow bureaucracy and don’t have to reapply for them if the job ends.
Okay, the math says if we pay everyone in the US over age 15 $1000/month, that comes to $3 trillion per year, or about 17% of the GDP. So, probably that’s hard to swallow at the moment, but two more doublings of productivity and you’re down at 4% of GDP. Doubling time looks to be between 20 and 30 years. That means the time to start thinking about this is now.
And we haven’t even counted the savings in administering the program. No forms to fill out, no bureaucracies struggling day and night to come up with more restrictions on what you can by with your SNAP card. That puts the time to do this even earlier.
Of course, the average SNAP benefit is more like $150/month, IIRC. So if we just gave everyone that much we’re already down around 2% of GDP.
Johnny Vector @ 8
An actual universal income scheme could have taxes adjusted so that close to median income, the (tax burden) -- (universal income) would be the on the level same as it is now. With low and middle-class incomes universal income and one tax rate (say 35 or 40 %) works like progressive taxation. With higher incomes, higher rates may be used.
Besides, U.S. already has EITC which has a similar fiscal effect as universal income would have in the case of working poor, doesn’t it? also universal income would partly replace Social Security pensions. What I mean is that for people who work with low income or are pensioners, at least part of the money is already paid.
Of course universal income would mean more predictable income for people with low incomes.
Saudi Arabia does that, too.
Of course, in Saudi, you’re only a full citizen if you’re a member of the house of Saud, which is a very small percentage of the population overall. But all citizens get a slice (based on genetic distance from the monarch’s gonads) of oil revenues. Even a minor member of the royal house gets a pretty big check every month.
I am one of the Swiss citizens who voted to reject the guaranteed basic salary. It’s not that I think the idea is bad per se (I just don’t know!), but the social net in my country is pretty efficient right now and would have been completely upset under the proposed law. Basically, like most of my compatriots, I voted conservative in order not to break something that seems to works well.
Also, yes, I feared that unemployment would go up rather than down as a result. But I’m quite happy to watch other countries try it out and stand corrected if the opposite happens :-)
Ivo: The program is certainly a major change, so a number of smaller pathfinder programs first seems like a good idea.
I’ve worked out the math similar to Johnny Vector, above, except if you adjust the tax burden to what it was back in the 50s, you wind up with something that already comes close to the net of 17% GDP, so it’s not like it would break the country for us to pony up for a system like that. And as noted, it doesn’t really account for all the savings from not having to administer all those disparate state/federal programs.
The paranoia of the right drives up the costs any social benefit plans as they are afraid somebody is scamming the system and install fraud programs that ten times more expensive than the savings that are seen, while meanwhile inconveniencing the recipients enormously.
I looked into unemployment benefits several years ago when corporate was having money troubles, and wanted us to be “furloughed” for week here and there to save money. It amounted to less than one of my bimonthly paychecks on for a total month. Welfare even less. There is an incentive to work, but it always nice to know you can have a roof over your head and basic food on the table. Nobody should be living in their car.
Yeah, that’s what I don’t get. Ok, so what if some people will ‘mooch’ off the system and manage to scrape by on less than $20k/year? All the other people that will have the basic necessities, so they can actually afford to look for a job and try to improve themselves will make it totally worth it (both economically, and morally).