Finland’s universal income is first of its kind

Photo Courtesy of Global Payroll Association // Finland has implemented a basic universal income.

Finland has become the first country in Europe to introduce a basic universal income. Under this new system, 2,000 people will receive 560 euros each month, for two years, regardless of whether they are employed or not. This is due to the fact that the Finnish government suspects some unemployed individuals are putting off getting a job for fear of losing unemployment benefits. As a result they have introduced this basic income in hopes that it will encourage the unemployed to seek jobs without fret that they will lose their unemployment benefits.

With the introduction of such an income, it is highly likely that people will start new businesses. If you want to start a business, and you’re not making any money, or worse, losing money you won’t get the same unemployment benefits as everyone else. As such, people tend to wait until they have enough money to take on such a risk. Now with the advent of this basic income, people will be less afraid to take risks, knowing that they will have this basic income as a safety net if the business fails.

While some people may argue that this basic income will disincentivize productivity and work, this is simply not true. In fact early experiments of such an income have disproved this claim, and have shown that it can even lower unemployment rates alongside poverty rates. In areas where this basic income has been or is being implemented, this has been shown to be true. In Alaska, residents receive a basic income, called the “Permanent Fund Dividend,” and since its implementation, 10,000 additional jobs have been created, and the poverty rate among Native Americans has dropped from 25% in 1980 to 19% in 1990. In accordance to what was found to be true in Alaska, Otjivero-Omitara, in Namibia a “Basic Income Grant Coalition” was introduced. Since its implementation in 2008, poverty has dropped from 86% to 68%, interestingly, crime also dropped 37%. Overall the idea and practice of a basic universal income is great, but will other countries join in on this new social wave?

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