Why Finland Remains Open To Basic Income

Global media outlets were quick to pass judgement on the basic income initiative currently being conducted in Finland. The Finnish Government recently opted to not extend the trial circulating conjecture the scheme had indeed failed.

But Europe's first national basic income experiment providing monthly stipends of 560 euros ($900) to a random sample of 2,000 unemployed people aged 25 to 58 with no obligation to seek or accept employment was always designed to be just that, a trial.

Seeking to promote employment in a country with rapidly ageing population (most outside Japan) and an unemployment rate of 8.5% the Finnish Government insists nothing has changed. 

The trial is set to run its full course and like all experiments the data collected will be evaluated before making any decision about expanding the initiative.

Finnish institutions take pride in evidence based policies, hence a willingness to be open and pilot ideas to reform and simplify the welfare system should come as no surprise.

With inequality on the rise, globalisation and increased automation, Universal Basic Income (UBI) that calls for an end to existing entitlements has found support on both ends of the political spectrum.

The Left highlight boosted mobility in the labour market by means of a providing an income between jobs, whereas the Right outline a reduced bureaucracy and the simplification of welfare.

Regardless of the fanfare the Finnish initiative has received, the experiment has met criticism based on its design, scale and duration. Described as a 'watered down' version as recipients were only chosen conditionally.

Even so, this is a randomised study, representative of an entire country, therefore is capable of delivering meaningful results on a theory currently built more on convictions than facts. 

Albeit limited, the data will offer insight on changes to the employment rate as the social welfare system is simplified.

The basic income initiative is but one approach being considered by the Finnish Government when rethinking welfare. 

The juxtaposed 'activation' model is also being tested, where Finns are forced to take on employment or risk losing a small percentage of their existing entitlements.

Just the same, the model has faced a wave of criticism, in this instance, for increasing control over the unemployed thus, adding to the bureaucracy and further complicating a welfare system struggling to cope with the demands of an ever-changing, modern labour market.

Another, the universal credit system already operating in the UK, which combines all existing welfare payment into a single monthly payment, will be also be trialed in Finland when the basic income initiative ends later this year.

Video: What is Universal Credit?

What's clear is Finland understands the value of being open to all ideas when deciding upon generational policies. 

Despite inferences of failure, the basic income experiment will do more to reveal benefits coinciding with a willingness to embrace novel ideas and opinions.


Author information: Jonathon Fogarty is the Information Officer at the Embassy of Finland. Opinions expressed are the author's own and do not reflect those of the Embassy of Finland in Canberra. Photo: Elina Sirparanta