Future of Work

Finland will end its basic income experiment in 2019

The trial began in January 2017. Image: REUTERS/Ints Kalnins

Grace Donnelly
Data reporter at Fortune magazine, Fortune magazine
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Finland’s universal basic income experiment will end next year, and lawmakers there are quietly moving toward a different welfare approach.

The basic income program in Finland, which was praised as cutting edge when it was announced, pays $690 to 2,000 Finns each month, with no conditions.

Finland’s social security institution, Kela, selected participants at random from people ages 25 to 58 who were unemployed. Initially, the program was supposed to be expanded this year to include workers as well as non-workers, but instead the monthly payouts to these individuals will end in 2019.

The basic income experiment was proposed as a solution to the unemployment rate in Finland, which reached a 17-year high of 10% in 2015. The payouts were designed to support citizens while encouraging them to find work, since the country’s other welfare benefits don’t apply to people once they are employed.

But in December, the Finnish parliament passed a bill that requires jobseekers to work 18 hours minimum for three months, making unemployment benefits contingent on finding some work.

“Right now, the government is making changes that are taking the system further away from a basic income,” Kela researcher Miska Simanainen told the Swedish daily Svenska Dagbladet.

While 70% of Finns supported the idea of basic income, surveys show that number drops to 35% when respondents are told that already-high income taxes would have to increase in order to cover the cost of the program.

Many participants reported lower stress levels shortly after the payments began, but researchers emphasize that the short duration of the program prevents them from drawing definitive conclusions about its effects. Kela will follow up with the Finns who participated for ten years, in order to identify the long-term effects of the program.

The idea of universal basic income has some powerful supporters in the U.S. as well, including many leaders in Silicon Valley from Tesla and SpaceX CEO Elon Musk to Facebook’s Mark Zuckerburg.

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He hopes to study the effects as lawmakers and disruptors alike confront issues like growing income inequality (Between 1979 and 2013, the income of America’s top 1% increased 192%, while income for the bottom 20% expanded only 46%) and the acceleration of job loss to automation.

For now, though, the Finns will wrap up their basic income pilot and focus on a universal credit trial, according to Finance Minister Petteri Orpo.

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