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Many cities in the United States have been pushing the concept of providing citizens with a universal basic income, but Finland’s recent experiment with the concept has fallen short of expectations.
As one of the first experiments on basic income done in Europe, Finland’s program has been closely watched by governments around the world. The program ended last month. The experiment was an examination of alternatives to current Social Security models.
Unlike America’s currently booming economy, Finland has been trying to combat persistently high unemployment, which has existed for years. However, last December, Finland’s unemployment rate fell to a 10-year low of 6.6 percent.
That’s over two-thirds higher than the US.
Envisioning a not-so-distant point in the future where automation and artificial intelligence could replace a variety of jobs, leaving citizens without a way to make a living, gave birth to the idea of providing citizens with basic income whether they are working or not.
The government of Finland ran a two-year trial that included 2,000 citizens who were randomly chosen from the unemployed. In the program, participants were paid guaranteed monthly income by the state, whether they found work or not.
For those Finns involved in the trial program, even if they did find a job and go to work, the amount of money they received from the state would not be reduced.
This was purposely built into the program to find out if receiving money for doing nothing would deter the incentive to look for work. For some it did.
The state had hoped that, while people had the security of guaranteed income, they would go out and find higher paying work that would get them off of welfare.
The idea was: Would people take advantage of the opportunity to add to their income by working and receiving a free monthly allotment on top of what they earned at a job?
Not surprisingly, few took advantage of the opportunity.
To paraphrase two popular songs, getting “money for nothing” wasn’t without benefits. Perhaps “money can’t buy me love” but in the basic income experiment – money did create happiness.
“The basic income recipients of the test group reported better wellbeing in every way in comparison with the comparison group,” said Olli Kangas, the chief researcher of the program. Participants reported being healthier and happier because of the program.
One of the program’s participants who had been unemployed for nearly a year, called receiving the basic income “winning the lottery.”
