Finland’s Ministry of Social Affairs and Health has issued its latest and apparently final press release outlining its long awaited Basic Income pilot project slated to begin Jan 1st, 2017. Near the end of the first year the project will be assessed for the feasibility of a second year as well.
This project will be narrowly focused on a small, random sampling of employable adults and the ways in which a BI might improve their employment chances. This project will not be looking at any other populations, vulnerable or otherwise, which might benefit from a BI. However, Finland’s government sees this pilot as the beginning of a “… culture of experimentation” designed to identify and then help address the most pressing needs of their citizens in the years to come.
Photo: “Colors of Finland” CC BY-NC 2.0 Mariano Mantel
Practically, this is a “negative tax”, advocated by the Nobel Prize laureate Milton Freidman over 40 years ago, and he expected to succeed, if given to all people regardless of their income. Obviously, it should be funded by usual taxes and duties.
At least it will stop making unemployment pay.
At the end, you will see that the majority will seek employment, to supplant their income, without loosing a penny of their “negative tax”.
To succeed, there should be 3 prerequisites:
1- Minimum wage rules should be completely removed, to allow the individual to work in low productivity work to gain experience for a higher productivity work.
2- The amount of that negative tax should be just enough for the individual to survive, but not enough to splash out on holidays and fringe expensive habits.
3- The society and private individuals should resist supplementing that amount, because such an extra generosity will reduce the incentive to find work. However, those unfortunate like the mentally or severely physically disabled, can be easily identified by a charitable private individual or society, and have the appropriate supplement. The beauty of private charity is its almost instantaneous ability to identify fraudulent claims at almost no cost and zero corruption, which is impossible to do by government public sector without huge specialist cost that is liable to corruption. In addition, the recepient will not be able to consider the supplement from charity as an entitlement.