Finland Experiments with Basic Income for the Unemployed

January 26, 2017

DaveSTo people familiar with sunny Silicon Valley, Finland may seem like a questionable tech hub. But thanks to the telecommunications giant Nokia, for years the snowy Scandinavian nation served as one of the central destinations in Europe for tech workers. Once Nokia began to collapse, however, the fortunes of many Finnish engineers declined as well.

These formerly prominent staffers then signed up for unemployment benefits in the hopes that the tech industry would turn around. When jobs largely failed to return, they were left in a strange predicament. While many could easily land jobs at startups, this meant they would lose their unemployment benefits. Plus, startups are risky, unstable ventures in the best circumstances, let alone the struggling Finnish tech industry. Rather than take a chance and fail, many skilled workers chose to remain on government assistance.
To combat this shrinking workforce, Finnish authorities have initiated an experimental program that has drawn attention throughout the world. Starting this month, the government will grant a basic income of 560 euros ($587) to 2,000 randomly picked unemployed citizens. The idea is to keep these people on some form of assistance while also allowing them to seek out additional income. Their basic salary is deducted from whatever benefits they already receive and continues even if they find a job. Officials say that they want to eliminate citizens’ fears “of losing out something.” But whether people use this opportunity for education or idleness remains to be seen. “It’s highly interesting to see how it makes people behave,” said Finnish official Olli Kangas. “Will this lead them to boldly experiment with different kinds of jobs? Or, as some critics claim, make them lazier with the knowledge of getting a basic income without doing anything?”

Questions:

 

  1. What are the pros and cons of Finland’s basic income plan?
  2. Would a universal basic income work in the U.S.?

Sources: Jari Tanner, “Finland to Pay Unemployed Basic Income of $587 Per Month,” Associated Press, January 2, 2017; Peter S. Goodman, “Free Cash in Finland. Must Be Jobless.,” The New York Times, December 17, 2016. Photo by Dave_S.

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