Finland to end basic income trial after two years
theguardian.comOther recent discussions about Finlands basic income:
https://hn.algolia.com/?query=basic%20income&sort=byDate&pre...
Basic income for some is not basic income. No country has tried this yet.
Most countries actually do have a form of basic income where they are subsidizing food, shelter, healthcare in some form or another for essentially all people falling outside of the safety net of income, pensions, social security & welfare, charity, etc. I tend to think of basic income as the former without the absolutely massive bureaucratic overhead. An enormous cost saving in other words. To put this in perspective: many European countries spend almost as much on unemployment programs and related bureaucracy as they do on the actual benefits payed to the unemployed.
With a basic income you could abolish minimum wage, make labor cheaper for companies and less risky, make it easier for people to take multiple small jobs to supplement their basic income and reduce their risk, stop forcing people to retire or forcing them to work until they are allowed to retire (both are bad), make all forms of income insurance opt in (pensions, disability benefits, unemployment insurance), etc. It just simplifies things a lot.
The reason this is not happening is that dismantling the existing bureaucracy is highly disruptive and will be hugely unpopular.
> The reason this is not happening is that dismantling the existing bureaucracy is highly disruptive and will be hugely unpopular.
And partly because it's not clear a basic income is actually better in practice. It's a huge change to how society operates, so it's hard to predict what effects it will have. I think a conservative approach that starts with small trials makes more sense than dismantling a large government bureaucracy that employs lots of people.
Some things simply aren't achievable with a conservative, incremental approach. Imagine yourself having a container ship and needing a cargo plane. You won't reach the skies by trying a pilot program with one engine and half a wing bolted to your hull.
Maybe universal basic income is one of those things where, to escape the local optimum and reach a global optimum, you have to start from scratch and go all in.
Sure, but you should bring a lot of evidence that it will actually work before you do something that disruptive. If the criteria for doing something is maybe it will work if we do it at a large enough scale than almost anything is permissible.
Edit: And with airplanes, or almost any engineering artifact, you start with a proof of concept and then build from there. We didn't go from container ships to cargo planes, we went from the idea that a person could fly to a very brief flight in a barely airworthy "airplane" that is nothing like a modern plane.
Is it really true that much of the spending goes on bureaucracy? In the UK the depatment of work and pensions spent £167 billion in 2012, of which £6.4b was spend on departmental and operational delivery costs. Admittedly this is still a large amount, but it does allow targeted spending, which might have some advantages too.
https://www.theguardian.com/news/datablog/2013/jan/08/uk-ben...
Varies from country to country of course. The UK has comparatively little job security and benefits and it is an expensive place to be out of work. I did the back of the envelope calculations for the Netherlands a few years back and the amounts spent on this are quite high. I've confirmed with friends from Finland and Germany that the situation is similar there.
But based on the numbers you cite, the UK has about 66M inhabitants. So 167 billion/ 66 million, is about 210 per month per capita. Not great to live on of course but it's a start. And this is absolutely everybody counting babies, children, the elderly, etc covered.
I quickly googled some numbers https://fullfact.org/economy/welfare-budget/ that are loosely aligned with what you cited with a little more detail. Based on their number of 217 billion, you get to about 273/month. That's a little under what wellfare gets you per month (https://www.gov.uk/income-support/what-youll-get).
Interestingly that 217 billion includes only 2.4 billion as unemployment benefits as opposed to a category of 'other' that is listed as 14.5 billion or 18 pounds per month per capita spent on what I assume is bureaucracy. That 217 excludes NHS, which is another 110 or so billion; or about 138 per month. Since that basically already takes care of healthcare for everyone; no need to change that.
You get where I'm going with this. if you start doing back of the envelope math like this, stuff starts adding up towards an admittedly lowish basic income for everybody being feasible at the cost of 23% of GDP. It gets better if you take into account that some people live together (aka. families) and can pool resources. It gets even more interesting when you start looking at the tax situation. Income tax + social insurance fees don't quite add up but can be supplemented by VAT, corporate taxes, and other fees. Arguably, if you make labor cheaper, you could raise the corporate taxes a bit. Also, people that work still pay taxes over what they earn extra. There are a lot of people that are not working at all right now that might work a little bit if it earned them some extra.
So, it's not a zero sum game and there are lots of financial knobs to fiddle with here of course.
This is one of the main oversights of UBI fans. E.g. disabled people definitely need more help.
Sure, just like today's disabled people are not left to die on the streets. Many disabled people never had careers to begin with so it is not a massive change. And you could always opt in to some form of disability insurance.
I'm talking from Euro PoV. In my country disabled people get payouts and special care regardless of their career or insurance. They definitely couldn't afford gear and care on common UBI.
If someone is disabled and never had a good career going, additional disability insurance is not an option for them.
Basic income for some is how you test whether all the claims you made are true. While I agree with everything you said, there are still many fundamental questions yet to be answered.
Another reason it is not happening any time soon is that rolling it out in a country such as Finland would be WAY more expensive than the current wealthfare models in Scandinavian countries as they stand now.
To roll it out for every citizen as a replacement to current wealthfare, the people who are currently receiving wealthfare will be receiving much less. To many, this would be unacceptable, as these families already are percieved to be struggling to make ends meet.
While I am still a big advocator for basic income in the developing world, I struggle to see how it would work in a country such as Denmark where I live. While I believe there are workarounds such as only providing basic income for the people who apply for it (still unconditional just opt-in instead of opt-out) there are no studies showing the effectiveness of the limitations that are necessary to make basic income feasible.
Finland and Scandinavia (especially Norway) are great cases for basic income. Those families who are struggling to make ends meet do it because they can't start working or they will lose welfare. Basic income will allow them to enter workforce, gradually. You just need to start implementing basic income slowly, giving everybody time to adjust - start with €100, create system for it and debug it, then add another €100 each year until desired level.
> Those families who are struggling to make ends meet do it because they can't start working or they will lose welfare.
Someone who has angst that is so extreme, they cannot leave their house without having a panic attack, is not out of a job because of a lack of incentive. I promise you, that person would prefer working a normal job if that were an option.
A mother of 3 young children is not on wealthfare because she has no incentive to work. she doesn't have a job because raising three young children and managing a house is fulltime work.
While it's still terrible that a huge amount of people are terribly disincentivized to work in the current system, the people who need the most care, are also the ones who would not be working after basic income either. These people would be receiving less than a living wage with no way of working afterwards either.
it is simply untrue to say that perverse incentives are the universal reason people don't have a job. We barely know if it is a reason as it stands right now.
There have been minimal trials in the west on basic income, and none of them have been here for long enough to measure anything meaningful.
>While I am still a big advocator for basic income in the developing world
How do they afford it ?
We pay for it :)
The west is so obscenely rich compared to most of the developing world that there simply is no excuse for us to not be helping out.
Give Directly, for example, is a highly rated charity on givewell, that focuses on giving both conditional and unconditional cash transfers to parts of the developing world.
Bureaucracy is also some type of basic income.
Disrupting bureaucracy means also higher unemployment, because that means, that those people have either to find another job or the will live on welfare as well.
I see this as a form of hidden unemployment that we just happen to favor sponsoring collectively for whatever reason. These people would fall back to basic income and be free to take jobs just like everybody else; depending on ability and willingness.
But I take your point and this is why I pointed out that dismantling this will be highly disruptive and unpopular. Ironically, the problem is bigger in countries that are more likely to otherwise be in favor of a form of basic income. I.e. countries with extensive existing social security systems.
> higher unemployment, because that means, that those people have either to find another job or the will live on welfare as well.
Remember, “welfare” means “health, happiness and good fortune”. Yet “living on welfare” has somehow come to mean being unable to afford shelter, food and decent access to society.
If you aren't faring well on it, it's not really “welfare”.
>I tend to think of basic income as the former without the absolutely massive bureaucratic overhead.
That isn't true though. The "universal" part makes it completely different. The only reason we are talking about basic income is because of major shifts in the workforce. It is about a new alternative to jobs if automation supposedly takes them all away. This is different to the current system, which is designed for a small subset of people who do not have the ability to work.
Talking about disruptive things... to provide an unconditional monetary equivalent of the benefits any unemployed people are currently entitled to (rent, minimum income, supplementary welfare) to everyone, or even every adult would by itself cost more than the entire current government budget, including current welfare costs – so you would really need to rework the whole tax system. Disruptive, perhaps? Or very simple to go ahead and “just try it”?
The currency of politicians is jobs and dismantling the inefficient bureaucracy is damn f*ing expensive.
Will we eventually find the ability to introduce a new political currency that has more spending power than jobs?
> The reason this is not happening is that dismantling the existing bureaucracy is highly disruptive and will be hugely unpopular.
Don't oil-rich countries like Kuwait, Brunei and Saudi Arabia have basic income?
Finn here. The trial has been criticized from the get-go as being a poorly-designed compromise; those of us with a more cynical outlook suspect that it was intentionally nerfed so as to discredit the idea of basic income in general. But I guess it's just politics as usual; the current government as a whole is not exactly sympathetic with the idea of free money to "lazy people". Everyone does seem to agree, though, that welfare traps are a problem with the current system.
> Everyone does seem to agree, though, that welfare traps are a problem
Do you have any programs like the EITC, where benefits fall on a curve and slowly phase out as you make more, so there's no hard cliff?
Wiki: https://en.m.wikipedia.org/wiki/Earned_income_tax_credit
Graph: https://en.m.wikipedia.org/wiki/File:Earned_IncomeTaxCreditW...
We have the opposite, it's more of a skyline graph. If you receive subsidies, a lot of the time, working or studying will yield large and unexpected decreases to your total amount of income.
From the outside, Scandinavia is generally regarded as a successful(-ish?) big-government model.
And yet, talk to any Scandinavian, and you get the same cynical comments about sub optimal government behavior...
Standards are set by experience; the better your experience, the higher your standards.
It's hard to find much about why, BBC has a link to a study by an OECD think tank criticising the program, but no idea if that study specifically motivated decisionmakers in Finland.
http://www.bbc.com/news/world-europe-43866700
Study: https://www.oecd.org/eco/surveys/Finland-2018-OECD-economic-...
Basic income is an admittance that hundreds of millions of people are no longer necessary. Governments and corporations will not pay billions of dollars per year to people who do nothing. It will result in a strange situation where companies like Apple will be giving people money so that they can buy the iPhones they make.
Eventually, these people will somehow have to disappear. This means there will also be less demand for the robots to make things. This would then end with a small population with robots occupying the planet.
Welfare is essentially a way to kill a human's soul. If the choice is to go out slowly like this, then I would say "it is better to die on your feet, then live on your knees".
Necessary for what? Maybe not optimizing iPhones. But somebody has to make the music that goes on the iPhones, and it's pretty hard to do that if you're working on their hardware full-time. There are already plenty of "necessary" people who consume the cultural output of the "unnecessary".
As for their eventual disappearance, they'll be neglected, but they won't be slaughtered -- if nothing else, that doesn't look good for the cameras. And if war breaks out in Elbonia between its "necessary" and its "unnecessary", Elbonia's enemies will probably provide military aid to the "unnecessary". It's worth remembering here that America lost in Vietnam.
That said, I think a lot of the support for basic income around here is connected to the demise of academia as a viable career track. Personally, I'd like UBI, but mostly because I'd use it to free up 40 hours a week (plus my commute, time outside of work invested in a career) for research in fields I'm interested in.
>Necessary for what?
For whatever the people who provide the money need.
>There are already plenty of "necessary" people who consume the cultural output of the "unnecessary".
I don't think the corporations/governments will just have a few hundred million people around to add some culture to the place.
>It's worth remembering here that America lost in Vietnam.
Yes but the infrastructure of modern society is extremely fragile. The occupying force (the governments/corporations) already have control of it at the start of the war. The only reason we have so many people is due to this infrastructure. If it was a war where the population was not as fully industrialized, it would be different.
That is not to say the robot owners will win the war, but lots of people would die before then.
>Personally, I'd like UBI, but mostly because I'd use it to free up 40 hours a week (plus my commute, time outside of work invested in a career) for research in fields I'm interested in.
That is what people think they will do, but it is not what they will do. It is not the utopia that they think it will be because there are fundamentals about human nature that mean we don't really just sit around thinking up theories and playing guitar. The people on welfare now do not have that life. They are mostly depressed and subdued, which is the point of welfare.
Humans in general need things like self-determination, the feeling of being valued, the ability to maybe have hobbies that cost more than a basic income. Getting a job won't be easy to make more money, as there will not be many jobs.
>That is what people think they will do, but it is not what they will do. It is not the utopia that they think it will be because there are fundamentals about human nature that mean we don't really just sit around thinking up theories and playing guitar.
We already have a sample population for this: retirees. Empirically, some people do need jobs, and some don't. I work with a guy who retired, couldn't stand it, and rejoined the workforce. On the other hand, my mother retired early to go into astrophysics.
I'm about to quit my job and work on improving my coding skills (and networking, and so on) until I get hired in tech. A few of my friends are doing the same. (Independently - I'd already decided to do this when they started telling me about their plans.) They seem to be doing better than they were before they quit.
Maybe that's a mistake, and I'll end up depressed and subdued if I'm not on someone's payroll. But I don't think so. I'm working a physically exhausting job with hours that aren't very compatible with having a life outside work - I don't think I have to worry about becoming more depressed and subdued.
> The people on welfare now do not have that life. They are mostly depressed and subdued, which is the point of welfare.
I think there are some important differences between welfare and UBI. If you're on welfare, it means you've failed at the grind - if you're on UBI, it might just mean you've opted out of it.
I don't know much about the welfare system, but I'd be surprised if it's possible for someone to live indefinitely on welfare alone. With UBI, that may end up being a possibility.
Another possibility with UBI is to use it to free up resources for investing in your future. I worked with a guy who was holding down three different jobs, working seven days a week, because that's what he had to do to make ends meet. Maybe he should just learn to code, but where's he going to find the time?
I'm interested to see what the final report on this program will say. My only concern with UBI programs is that if a company, landlord, etc. knows someone is receiving an additional amount of money for free each month, then they can raise their prices by that much.