What Finland Can Teach Us About Universal Basic Income

Printed from: http://newbostonpost.com/2018/05/11/what-finland-can-teach-us-about-universal-basic-income/

 

In January 2017 Finland began giving some of its citizens free money.

The idea was simple. The government selected 2,000 unemployed people at random and started giving each 560 euros (about $670) a month for two years, with no strings attached. The participants, who are between 25 and 58 years old, are mandated to participate and required to remain in the experiment until the end of two years.

Now, many of the participants were receiving unemployment benefits that exceeded 560 euros before the experiment began. Such participants got additional funding from the government, such that the unemployment benefits remained the same during the experiment plus they got extra money. A major policy change for unemployed people taking part in the experiment is that they can earn income from work, without incurring a decrease in unemployment benefits. The Finland Social Security Institution (known as KELA) has been monitoring how participants behave with respect to seeking employment, as measured against a control group of 175,000 people who do not receive any additional money from the government.

Finnish government officials who supported the experiment wanted to find out if a policy change would incentivize unemployed people to step into the job market, even if it meant taking on part-time or poorly paid work. Supporters of the idea would have been encouraged if low-wage unemployed people pursued and engaged in temporary employment when they had some form of fixed income from the government.

So what happened? The results haven’t been made public. But we know that the government announced April 25 that the program won’t continue. It is widely thought that the results are not promising. If so, what does that mean for supporters of the idea, which finds advocates elsewhere in Europe and on the West Coast of the United States?

The hope of universal basic income advocates is that if the government pays everyone of working age a so-called universal basic income then everyone will have enough to meet basic needs, and those who want to make more money will work for it. It is argued that offering a universal basic income for all is compassionate social policy.

But what is compassion? The definition of the word includes ideas such as to have pity or mercy or to feel sympathy for another. A contemporary view of compassion would likely define it as giving to a needy person to alleviate suffering, with no conditions or strings attached.

Yet this kind of compassion is too simplistic to help solve deeper social problems. It works on neither religious nor sociological grounds, because it leaves little room for freedom, dignity, or self-determination.

The rhetoric of universal basic income supporters betrays a bias, because it implies that work is simply a means to an end, and that the end, which is money, is the most important focus. If work were simply a means to an end, then one could call any funding that an individual gets “income.” Traditionally, only money coming from work engagements has been called income. Furthermore, if work were simply a means to an end, then it would not matter if robots did all the work in society and citizens had a minor role, as long as everyone got payments deposited into their accounts monthly by government. This bias is likely also a reason why many people judge specific kinds of work as being undignified because the wages are too low.

However, human experience, Judeo-Christian ethics, religion, and history suggest that the role of work in society is much deeper and more significant than the amount of money that a job pays. To begin with, a feeling of satisfaction comes from knowing that one’s contribution is needed in society. Second, a sense of dignity comes from knowing that one’s performance matters in an organization. Third, a sense of fulfillment stems from doing good work and meeting human needs through one’s effort, discipline, and self-sacrifice.

Work develops character. Without meaningful work, we would have less opportunity to use, hone, and develop our gifts, and hence we would have limited opportunity for self-actualization or self-realization. These are some of the reasons why our feelings toward our wages and the meanings we attach to work are different from other kinds of money flows we may receive.

If work is so important, then our policy makers and executives could show compassion by encouraging more opportunities to work and by promoting policies that encourage universal work re-entry. Policy makers should work with private sector executives to provide, not free money, but a set of incentives and a growing number of re-entry level jobs for those who seek work, not merely because it gives them extra income, but because it offers them a way to contribute to society and develop as a person. 

This means that we need to explore framing the problem in a different way. For example, what will happen to the willingness of unemployed people to take a job for low wages if the work offered contacts that might be useful in the long run, opportunity to learn, and potential to make meaningful impacts on the lives of others? If we approach the problem that way, I suspect that we will develop new organizational models that are more sustainable than universal basic income.

 

Nick Dedeke is a teacher and writer.

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