Finland Is Testing Basic Income, But Not for the Reasons You Think

We already know that Finland’s pretty great. This is the country that provides a baby box of supplies to all new parents, and the box itself doubles as Baby’s First Bed. It’s also the country that incentivizes physical activity, which in many cases translates to “recess for adults.” (I could see how that might be a terrible idea, given our collective memory of bullying and kickball, but I’m going to assume Finland’s recesses are invigorating and refreshing.)

Now, Finland is testing a new basic income plan that would, if successful, give people a flat amount of money every month.(You might remember Ester mentioning Finland’s proposed Basic Income in her post about leaving America when the costs get too high.) Some sources say the Basic Income will only apply to citizens, other say it’ll apply to “residents,” and it’s not yet clear where Finland will draw the line.

It also isn’t clear how much money each person will receive. Some sources are reporting 800 Euros, but Vox reached out to research director Olli Kangas, who responded “€800 is just one sum, nothing more. Nothing is fixed yet. It can be any other sum or many other sums.”

What is clear is that Finland and Kangas’s team are making plans to test Basic Income on a small subset of Finnish adults. You might think this plan was specifically designed to help the poor, but as Fast Company reports, it’s much more about the changing nature of work:

First, increasing numbers of Finns are working part-time, or on a temporary or freelance basis. These people don’t qualify for work-based benefits and, because they’re working, they don’t get unemployment benefits either. They’re caught in the middle. “One thing is to make our social security more responsive to those changes in the labor market,” says Kangas, who is also the research director at the Finnish Social Insurance Institution (KELA).

The Independent adds that it’s a way to encourage job creation and keep small businesses afloat:

It is true, as the Finns might admit, that it amounts, like tax credits, to a subsidy to lower-paying employers, but, then again, if that means lower unemployment and helping people into jobs, then that might still be worth doing. The “living wage” approach only works if it doesn’t destroy jobs by being set too high. As is also the case with tax credits, the wage “subsidy” doesn’t always go to wealthy multinationals, but also to, say, a family-run hotel in a run-down seaside resort finding it difficult to survive.

Vox brings it all together by noting that, at it’s core, basic income is about community:

The idea is to see what happens to a community under a basic income, rather than just to individual people. Having a whole town get benefits could have cascading effects as households escape poverty, as some people use the income guarantee as insurance so they can take risks and form companies, as universities see increased enrollment from people better able to afford supplies, etc. “If people in a smaller area are getting the benefits, their behavior vis-a-vis other people will change, employers and employees will change their behavior, encounters between clients and their street-level bureaucrats (social workers, employment offices, etc.) will change, and the interplay between different bureaucracies will change,” Kangas says.

This is absolutely fascinating because these are the same problems we discuss on The Billfold every week: how to earn a living while working gig economy or freelance jobs; how the changing nature of work makes it harder for individuals to achieve financial stability; how many people — and businesses — need additional sources of funding (venture capital, parents, crowdfunding, etc.) to survive.

It also worries me, because in many ways it’s an acknowledgement that our current capitalist system isn’t working. Which, sure, we already kinda knew that, but Finland is straight-out saying “We know that your average small business can’t afford to pay people a living wage. We also know that companies are cutting back on expenses by switching to freelance and temp workers. It looks like neither businesses nor their employees are making enough money, so we’re here to help.”

I am very excited to see what happens with Finland’s Basic Income plan. The Dutch city of Utrecht is also supposed to start testing out Basic Income next year, which means I need to put a Google Alert on “basic income” so I can keep you all up-to-date on the results.

Photo credit: Miguel Virkkunen Carvalho

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