Finland is trying a radical experiment: They’re giving 2,000 citizens a guaranteed income, with money that continues coming in whether members work or not.
The program, which begins this month, is one of the first attempts to test a universal income. Members will receive $587 a month regardless of wealth, income, or employment status.
The idea is that universal income offers better security for employees, especially as technological advances lower the need for human labor. It will also allow those on unemployment to pick up odd jobs without losing benefits.
The trial program will run for two years. Participants were random, but were getting unemployment benefits or an income subsidy. The money paid through the program is tax exempt.
If the program is prosperous, it may be expanded to include all adult Finns.
The Finnish government believes that in the long run, the initiative could save money. The country’s welfare system is very complex and expensive, and simplifying it could lower costly bureaucracy.
The change may also encourage more people on unemployment to look for work because they won’t worry about losing unemployment benefits. Currently, some unemployed workers avoid part time work because even a small increase in income could result in canceling their unemployment benefits.
The idea is not just unique to Finland.
Advocates point out the Italian city of Livorno, which began a guaranteed basic income for the 100 poorest families in the city in June. The plan expansion went to 100 additional families starting Sunday, receiving $525 per month. In Canada, Brazil, Iceland, and Uganda, pilot programs are also in the works.
Last year, Switzerland considered giving $2,500 to every adult citizen a month, but the plan was rejected in a vote. Over 75% of voters were against the plan.
The best example of a guaranteed income program may be in the U.S. Since the 1980s, Alaska has been giving residents annual cash payments, a dividend from the state’s oil earnings. BIEN, a group that fights for universal income, describes it as the first genuine “universal basic income system.”