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Finland will provide basic income to help the jobless

Maija Unkuri of BBC in Helsinki | Tuesday, 17 January 2017


"I was so surprised when I got the letter, and a bit sceptical too," says Liisa Ronkainen, one of 2,000 Finns chosen for a government experiment to provide unemployed people with a basic income.
Out of work for half a year, Liisa, 26 and from Helsinki, has been looking for a job without success.
"While I'm unemployed I will only get €36 more per month with the basic income. I've always been positive about the idea, though, so it was nice to be one of those who were chosen."
Basic income has frequently been suggested as a way of cutting welfare bureaucracy as well as poverty.
But one of the main reasons why Finland's social insurance agency Kela is trying out the monthly tax-free payment of €560 (£490; $600) is to see whether providing a basic income will make the unemployed more eager to go into short-term jobs.
The benefit system in many cases provides people with little incentive to go into low-income jobs because welfare is generally cut back if you start earning.
"Every single euro that a person earns diminishes his or her social benefits," says Olli Kangas, head of society relations at Kela.
"In some cases an unemployed person is afraid of losing their benefits in the future, if he or she receives a temporary employment."
The idea behind the basic income experiment is that any earnings would be a supplement; €560 a month may not sound much but it is a start.
"The government wants to see if it's possible to eliminate at least the worst disincentives to work," says Mr Kangas.
Randomly selected from Finland's unemployed, the 2,000 taking part in the experiment were all receiving the lowest rate of unemployment benefit. After tax, it was little different from the €560 they now receive monthly in basic income.
The difference is that they will receive it without filling in a form and irrespective of whether they get a job or not over the next two years.
For Liisa Ronkainen, already looking for work for several months, it is certainly an attractive idea.
"Now that I will get a salary in addition to the basic income I might try even harder," she suggests.
And there was a similar message from another of the participants, Juha Jarvinen, who has been out of work for five years but now hopes to start a new business. "For my part, the basic income will mean I can escape enslavement and feel that I am a functioning citizen again," he told Finnish public broadcaster YLE.
The trial has aroused interest worldwide, because it will answer the burning questions about how people out of work will respond to the idea of a basic income.
Some might decide to acquire more education or change their career, to make themselves more attractive to the labour market. Others might seek to start a business.
But there is always the chance that it could be used as an excuse to take it easy and work as little as possible.
None of those chosen was given a chance to say no, so the outcome of the project will not be slanted. And no-one will receive less money than before.
As for cutting red tape, the prime objective behind the pilot, there will be a partial improvement for those taking part.
Most of those involved receive additional social benefits in the form of housing benefit or a higher unemployment benefit because they have children. The form procedure to get these will remain unchanged during the experiment.
But for Finnish authorities bureaucracy will diminish considerably. If any of the 2,000 start studying, get a job or lose a job or even develop a long-term illness, they will not have to pass the information on. Their basic income will not change.