Finland’s Basic Income Experiment
Finland’s Basic Income Experiment was set up in January 2017 with a random sample of 2,000 unemployed people being paid an unconditional monthly income
of €560. “The main goal is to see if the mechanism of free and unconditional money incentivises people to take on work,” says Marjukka Turunen, head of implementation of the Basic Income Experiment and director of change management at Kela.
“We have lots of bureaucratic traps for people getting into work in Finland, so we need to figure out how to reshape the social mobility system. The current system isn’t working as we’re in a situation where everything is good when you’re either totally employed or totally unemployed.”
The trial finished this January and analysis will take a year to complete. But some “great stories” have already emerged.
“One guy started his own business. Some took up jobs with employers and others were studying, which they said they wouldn’t have done before on unemployment benefits. Another person said ‘I don’t need to worry when the phone rings that it’s the employment offices offering me a job I can’t take as I’m caring for my elderly parents’,” Turunen recounts.
From what she has seen so far Turunen believes that while basic income incentivises some to work, “free unconditional money isn’t good for everyone”.
“Some people need the punishing system and some people need the carrot system,” she says.
Namibia’s BIG Project
Between January 2008 and December 2009 the world’s first Basic Income Grant pilot project was conducted in a Namibian village with high levels of poverty, unemployment, hunger and income inequality. All residents below the age of 60 received a monthly unconditional payment of N$100 regardless of social and economic status.
Several interesting findings transpired. “By no means did people become reluctant to work; quite the contrary. The money was circulated locally and people managed to get more income by setting up small businesses like stitching clothes or gardening, or people pooled money and set up small shops,” explains Dirk Haarmann, then-director of the Desk for Social Development of the ELCRN, which coordinated the project.
It also incentivised adults to seek education to help them budget with their new income and learn skills to boost it. Demand for fairer treatment and better-quality work also increased: “We got stopped by a white farmer who said people weren’t willing to work for him anymore – he’d been paying people N$10 a day to labour in the sun and people realised they could do something better.”
However, Haarmann is dubious as to whether the same outcomes would be seen in the UK. “Namibia is a developing country with a huge discrepancy between rich and poor,” he says. “But then humans aren’t so different in terms of psychology and getting out of precarious situations. I think more people would engage in activities that are useful for society rather than just spending time getting an income in a job they feel doesn’t contribute anything.”