Can unconditional welfare cure unemployment in Finland?

Finland is giving free money to 2,000 randomly-selected unemployed people to see if it encourages them to work. The one-of-a-kind trial is being watched by other countries considering radical forms of welfare.

Lydia Morrish
Lydia Morrish WikiTribune, United Kingdom
Source: WikiTribune
Can unconditional welfare cure unemployment in Finland? - NewsMavens

Why this story matters:

Universal basic income (UBI) has a simple premise: scrap the existing welfare state and replace it with an unconditional cash payout for everyone, regardless of whether they’re at work or on the sofa.

It's an old idea but recent decades have seen nations all over the world, including Scotland, Switzerland and now Finland, consider a basic income for all. Finland is making the most movement with the experiment that's being watched around the world.

Those partaking in the trial, which is now halfway through, will still receive the payouts even after they take a job.

Every month, €560, the equivalent of $667 or £495, appears in Marja-Liisa Lähteinen’s bank account, from the Finnish government. Lähteinen, 32, who lives in Finland’s eastern city of Kuopio, snow-covered and freezing when I visit the basic income money has allowed her to think more freely about her finances and she thinks a welfare system running on UBI could solve unemployment problems.

The experiment is key to many of us who live in Europe because, if it is successful, other nations could base their welfare models on basic income. It's simpler, less bureaucratic and is a potential life-saver for freelancers or those with more sporadic work patterns. 

As Marjia told me over a cup of tea in a quaint cafe, basic income could mean people wouldn’t "have to submit to crappy jobs just to survive."

work,finance,economy

Details from the story:

  • Finland is in the middle of a radical experiment on the concept of a Universal Basic Income (UBI).
  • Every month, €560 is dropped into the bank accounts of 2,000 randomly-selected participants. Even if they get a job, they keep receiving the payments.
  • The two-year trial is being watched globally by world leaders, media and the business elite, who are curious about the potentially revolutionary welfare system.
  • It also has its critics: one Finnish politician dismisses it as an outdated solution to new and complex problems, calling it a “1970s solution”.
  • One of the main premises of the experiment is whether unconditional money from the state will ease unemployed people’s fear of losing benefits they have come to depend on.
  • No official results about the experiment are out yet, but participants report positive feelings and better financial security.
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