Finland’s Universal Basic Income Which Promised Fixed Amount To Unemployed Fails

The Logical Indian Crew

April 27th, 2018

Image Credit: Lombardiletter

Finland has decided not to extend the Universal basic income (UBI) trial which will end next year. The universal basic income, the trial of which was started in January, 2017, selected 2,000 unemployed people aged 25 to 58 who were paid €560 ($806) monthly, unconditionally.

Kela, a Finnish social security agency requested the government for extra funding to expand the two-year trial to group of employees this year, however, this request was turned down by the government saying the payments to the current participants will end in january, 2019.

KELA’s Miska Simanainen told Swedish Newspaper Svenska Dagbladet, “The government is making changes taking the system away from basic income.”

Olli Kangas, one of the experiment’s designers said, “The eagerness of the government is evaporating. They rejected extra funding [for it].”

Supports of this scheme held an opinion that since the people would have income even the jobs, this would boost the mobility in the labour market.

Some people saw this scheme as a way to help unemployed people secure temporary jobs as it guaranteed safety net. Before the scheme came into being, a jobless person would refuse a low-income or short-term job out of fear of having their financial benefits reduced drastically under Finland’s complex social security system.

With the government planning to scrap the Universal basic income scheme, it hopes to replace it with other schemes for reforming the Finnish social security system.


Universal basic income

Basic income is an idea to provide residents of a country with regular unconditional fixed amount of money. This can either be from the government or some other public institution, in addition to income received from other sources.

Finland began the first national UBI program on 1 January 2017. It was first of its kind and was observed eagerly by commentators around the world as it was believed that it would provide conclusive proof of the merits or demerits of providing a universal basic wage for all citizens.

Through it, 2000 randomly picked unemployed Finns (between ages 25 and 58) were receiving a guaranteed sum of €560 ($806) per month – to be paid even if they find work.

The unemployment rate in Finland, a country with 5.5 million people, stands at 8.1%.  The Finnish government agency responsible for the country’s social benefits, KELA, said that the scheme’s goal was to abolish the “disincentive problem” among the unemployed.

Proponents of a universal wage argue that it incentivises unemployed people to seek different jobs and, in the long run, cuts government spending on welfare schemes. Whereas the opponents of the idea argue that it is untested and costly, and say it could increase unemployment by ensuring an unconditional and steady flow of income.

 

Share your thoughts..

Propelled by

VOLVO

Make Your City Safe

Related Stories

Finland’s Universal Basic Income Which Promised Fixed Amount To Unemployed Fails

Delhi Economic Survey 2017-18: City’s Per Capita Income Grows Almost Three Times The National Average

Universal Healthcare Coverage

Karnataka Govt To Introduce Universal Healthcare Coverage For All Households From November 1

Andhra Pradesh Govt To Give Monthly Allowance Of Rs 2,000 To Unemployed Youth

Economic Survey 2016-2017

These Are The Highlights Of The Government’s Annual Economic Survey Which Was Released Today

Scotland Baby Box Scheme

To Ensure That Every Child Gets An Equal Start, Newborns In Scotland Get Boxes With Essential Items

Latest on The Logical Indian

News

Fake WhatsApp Forward Claims Another Victim; Transgender Thrashed To Death In Hyderabad

Awareness

Women In Rural Uttar Pradesh Declare War On Skin Infections

News

Another Madhya Pradesh Farmer Dies At Mandi Waiting To Sell His Crop

News

Labour Party Calls For Removal Of Vedanta From London Stock Exchange After Thoothukudi Incident

Health

Nipah Virus Did Not Spread Through Bats; Bihar, Sikkim Issue Advisory: Reports

Others

70% Ganga Will Be Clean By 2019: Nitin Gadkari