Using a unique way to combat unemployment in Finland, the country’s government is drawing up proposals where it would pay every citizen a basic income of $1,165 per month and in turn, do away with unemployment benefits altogether.
Under the proposals crafted by the Finnish Social Insurance Institution, the payments (which are tax-free) are designed to replace all other benefits and will be paid to all adult citizens - regardless of whether they have any other income sources.
And although it may sound counterintuitive, the intent of this basic government-paid income is to encourage more Finnish citizens to get back to work. Presently, the country experiences record levels of unemployment. And, as the current unemployment benefit system currently operates, citizens know that they will be worse off if they take low-paying temp jobs and lose the welfare benefits rather than just remaining unemployed and keeping the benefits. Therefore, it currently makes more sense to remain unemployed.
In fact, more than 10% of Finland’s workforce is without jobs, and that number rises to a whopping 22.7% among the country’s young adults.
The Finnish Social Insurance Institution commissioned a survey and found that almost 70% of the country’s population supports the idea of a national, government-paid basic income.
Those who oppose the proposal warn that receiving a basic income could potentially take away people’s incentive to get jobs and further lead to greater unemployment rates. But, those who support the plan point to those experimental programs that have worked successfully. Dauphin, a Canadian town, experimented with a municipal-paid basic income guarantee in the 1970s and both the economic and social results were very positive.
The Finnish prime minister, Juha Sipila, supports the proposal, stating that, “For me, a basic income means simplifying the social security system.”
The plan will cost Finland $55.5 billion annually, and the Institution is set to formally submit its proposals in November of next year.