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article imageFinland finished a guaranteed income project for the unemployed

By Ken Hanly     Feb 9, 2019 in Politics
From January 2017 until December 2018, 2,000 Finns without jobs were provided with a monthly payment of the equivalent of about $634 US dollars for two years.
Results of the pilot project
The aim of the project was to provide a safety net. It was thought that this might help the participants find work or else would support them if they had to take occasional or part time work. The income did not appear to help them find jobs but the participants do report that they felt happier and less stressed.
Project was run by Finland's social insurance institution
The project was run by Kela, Finland's Social Insurance Institution. The project involved 2,000 randomly chosen people on unemployment benefits. This was the first European country to try out an unconditional basic income. Often the idea is meant to be applied to everyone with no means test. However, the Finnish scheme was just for those who were unemployed.
The idea is undergoing pilot projects in several places around the world.
According to Wikipedia: "Mincome was an experimental Canadian guaranteed annual income project that was held in Manitoba, during the 1970s. The project was funded jointly by the Manitoba provincial government and the Canadian federal government under Prime Minister Pierre Trudeau. It was launched with a news release on February 22, 1974, under the New Democratic Party government of Edward Schreyer, and was closed down in 1979 under the Progressive Conservative government of Sterling Lyon and the federal Progressive Conservative Party of Joe Clark. The purpose of this experiment was to assess the social impact of a guaranteed, unconditional annual income, including whether a program of this nature would cause disincentives to work for the recipients and how great such a disincentive would be."
Although the project was never completed the data was saved. The small city of Dauphin was part of the project. Evelyn Forget a University of Manitoba economist did a study which compares health, social and economic outcomes of Dauphin residents with those in the rest of the province during the time of the study. She found that only new mothers and teenagers worked less. New mothers wanted to spend more time with their babies and teenagers were under less pressure to work. More teenagers graduated than in other parts of the province. During the time that Mincome was in force hospital visits declined 8.5 percent. There was also a reduction in rates of psychiatric hospitalization.
Did the Finnish program work?
Miska Simanainen, one of the researchers at Kela said that the government was testing the program to see if it would help people find jobs or learn new skills and would provide a means to reform the social security system.
The program did not appear to help the unemployed people involved find jobs. Some individuals did find jobs but at no higher a rate than those who were not in the pilot project. The researchers are still trying to find out why this was so. The final report is not to be published until 2020.
If the aim had been just to make people happier who were jobless than the project was a success.
As former newspaper editor Tuomas summed things up: "I am still without a job. I can't say that the basic income has changed a lot in my life. OK, psychologically yes, but financially - not so much."
Mr. Simanainen says that he doesn't like to think of the trial as having "failed". He said it was not a failure or success, it provided more information that was not available before the project was launched.
Criticisms of the universal basic income (UBI)
On the left many see the UBI as just a band-aid solution when what is required is fundamental structural reforms in capitalism.
Others on the left see the scheme as a way of slashing or doing away with other benefits and worry that rates will be set too low to allow for a decent living.
Those on the right and others worry that the UBI applied universally would be too expensive. It encourages a something for nothing culture whereas people should be rewarded with income only if they create value in the system.
More about guaranteed incomes, Finland, Kela
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