by BIEN | Mar 6, 2017 | News
Sarah Gardner, a reporter for Marketplace, published three articles in December 2016 on the topic of universal basic income (UBI): How to support yourself after the robot revolution, Finland to test a basic income for the unemployed, and On the Canadian prairie, a basic income experiment.
In How to support yourself after the robot revolution, Gardner describes the prediction of Lawrence Summers, Former Undersecretary of International Affairs, that by the middle of the 21st century, one third of men between the ages of 25 and 54 will be out of work. The reason is automation.
Sam Altman, Gardner says, also sees automation, including software automation, as a factor for future unemployment. Altman and others are raising millions of dollars for a basic income experiment in Oakland, California.
In Finland to test a basic income for the unemployed, Gardner talks about the “buzz” around UBI in Silicon Valley, the Netherlands, and Finland. Finland, specifically, is facing a hard time with high youth unemployment. — general unemployment is at 8%, while young adults have a 20% unemployment rate. Olli Kangas, the director of government and community relations for KELA (the government agency responsible for public benefits), said, “In the present system they are a little bit afraid of accepting job offers, say, for two months or three months, because they think that, okay, how much would I benefit, in terms of money?”
In On the Canadian prairie, a basic income experiment, Gardner notes, as in the other articles, that automation and temp work are modern issues. Previously, however, there were the Mincome experiments in Manitoba, which trialled a payment similar to UBI.
While these trials were conducted in several parts of Manitoba, “the most interesting pilot was in Dauphin, a small farming town more than three hours northwest of Winnipeg,” Gardner says. Dauphin was a tight-knit Ukrainian community, and the Canadian government gave money, through the program, to ensure families “would never fall below a basic amount.”
Read the full articles here:
Sarah Gardner, “How to support yourself after the robot revolution“, Marketplace, December 7, 2016.
Sarah Gardner, “Finland to test a basic income for the unemployed“, Marketplace, December 13, 2016.
Sarah Gardner, “On the Canadian prairie, a basic income experiment“, Marketplace, December 20, 2016.
by Kate McFarland | Jan 26, 2017 | News
Videos of two lectures on Finland’s basic income pilot are now available online. The lectures, delivered by Marjukka Turunen and Olli Kangas of Kela, were originally aired as part of a public event on Finland’s “social innovations”.
As previously announced in Basic Income News, Kela, the Social Insurance Institution of Finland, held a series of short lectures called “Socially Innovative Finland” on January 12, 2017. The event, which was open to the public and streamed lived online, highlighted two “social innovations” from Kela: the eight-decade-old maternity package, under which all mothers-to-be receive a package of child necessities, and the two-year basic income experiment launched this year. Two speakers, Marjukka Turunen (Head of Legal Affairs Unit) and Olli Kangas (Director of Government and Community Relations), discussed the basic income experiment and fielded a variety of questions from the live and online audiences.
Olli Kangas: “Basic income – Part of tomorrow’s social security?”
Kangas situates Finland’s basic income experiment in its political and economic context: the center-right government that took office in May 2015 decided to investigate a basic income as a way to remove the disincentives to work and reduce the bureaucracy inherent in Kela’s current programs of unemployment compensation; meanwhile, changes in the labor force underscored the need for a revised system of social security.
Kangas describes the rise of short-term labor contract labor and the threat of automation as general sources of motivation for basic income. Then, focusing specifically on the Finnish context, he discusses the country’s increase in self-employment as well as its high rate of structural unemployment. He goes on to explain how Finland’s current welfare system can creates a disincentive to work. In some cases, as he describes, individuals who leave unemployment benefits to take a job face an effective marginal tax rate of 80-100%. Moreover, the current system creates “bureaucratic traps” whereby individuals are deterred from accepting short-term work (asking, e.g., “If I accept the job for six months or so, do I again qualify for the benefit I used to have?”).
Marjukka Turunen: “How the basic income experiment works in practice”
Turunen provides an introduction to Finland’s basic income experiment, including an overview of the experiment’s design, motivation, and implementation. She explains why the researchers hypothesize that the basic income will provide an incentive for unemployed persons to take on paid employment–the main outcome that the experiment has been designed to test–and describes other potential benefits to individuals. For example, she notes that financial security brings “peace of mind” and allows individuals to plan for the future with less uncertainty. Furthermore, the basic income eliminates the time-consuming task of applying to Kela to maintain unemployment benefits–which, as she mentions, requires the submission of paperwork every four weeks–or to change benefit status due to sickness or childbirth. Recipients of the basic income are not required to inform Kela of their employment status, income, or other life changes.
Turunen also describes Kela’s process of selecting a sample of 2000 individuals for the experiment, contacting them, and distributing the first funds. She points out that researchers will not conduct interviews of the subjects during the course of the experiment, in order to avoid a possible source of influence on their behavior. Moreover, it is the policy of Kela not to disclose information about the basic income recipients to the media. Nonetheless, Turunen notes, some recipients have themselves divulged information about their situations and reactions to the basic income trial; she reviews some of these preliminary reactions near the end of the lecture.
Reviewed by Danny Pearlberg
Photo: Helsinki, CC BY-NC-ND 2.0 Jonathan
by Kate McFarland | Jan 12, 2017 | News
Finland’s basic income experiment is now underway, with the first payments having been mailed this week. With the experiment generating much media attention, here is a review of some of the basics.
On January 1, 2017, Finland launched an experiment in which 2,000 individuals–randomly selected from a pool of unemployment benefit recipients–will receive unconditional cash payments of €560 (about 590 USD) per month for two years.
The first payments were sent out on Monday, January 9.
The main goal of the experiment, as it presently stands, is to determine whether unconditional cash transfers are more effective than means-tested unemployment benefits with respect to promoting job-seeking and employment. Olli Kangas, leader of the research team at Kela that designed the experiment, has recommended expanding the experiment to other target populations (including “other persons with small incomes” and individuals under age 25).
The Sample
The test subjects comprise 2,000 individuals between the ages of 25 and 58 who were receiving unemployment benefits from Kela (the Social Insurance Institution of Finland) as of November 2016. These subjects were randomly selected from a pool of about 175,000 individuals nationwide.
To avoid selection bias, participation in the experiment was mandatory for those selected.
Kela reports that, of those selected, 87% had been receiving the Labour Market Subsidy, while 13% had been receiving the Basic Unemployment Allowance. These programs provide taxable payments of €32.80 per day, five days per week, to those (and only to those) who are officially registered as unemployed job seekers. The benefits are subject to withdrawal if a recipient turns down an offer of work or training. Furthermore, if a recipient takes temporary or part-time employment, the amount of the benefits is decreased (as a general rule) by 50 cents per euro in earned income over €300 per month.
The Basic Income
Those included in the study population will be paid a monthly basic income of €560 for a period of two years. Unlike the Labour Market Subsidy and Basic Unemployment Allowance, the amount of the benefit does not decrease if the recipient earns additional income (regardless of the amount of earned income).
The basic income is not subject to tax. However, it is counted as income for the purpose of determining eligibility for additional social assistance.
Kela notes that there are some circumstances under which payment of the benefit might be terminated, such as moving abroad or entering military service.
Research Objectives
The Finnish government is interested in testing basic income as a way to remove work disincentives in the current welfare system as well as to reduce bureaucracy.
Kela plans a study of the trial in which the group of the 2,000 individuals receiving the basic income is compared with a control group consisting of all individuals in the original target population who were not selected to receive the benefit. The study will examine, for one, differences in employment rates between these groups.
Information about individuals’ employment status will be gathered through register data. Kela will be conducting no interviews or questionnaires of the test subjects, since such interventions have the potential to influence behavior. (Kela has also expressed concern about interviews with test subjects conducted by the media.)
It is possible that the experiment will be expanded in subsequent years–as research team leader Olli Kangas has recommended–to test different levels of basic income or different taxation models, or to include additional population groups. However, no firm plans have been made, and moving forward with any expansion is contingent on the amount of funding allocated to the experiment by the Finnish government.
More Information
The latest information about the study can be found on Kela’s “Basic Income Experiment 2017-2018” webpage: https://www.kela.fi/web/en/basic-income-experiment-2017-2018.
Thanks to Danny Pearlberg for reviewing this article.
Photo: Saariselkä, Finland CC BY 2.0 Ninara.
by Kate McFarland | Jan 7, 2017 | News
Kela (the Finnish Social Insurance Institution), the government body running the nation’s newly launched basic income experiment, is hosting a live-streamed discussion of the basic income trial as well as the country’s long-standing maternity package.
On January 12, Kela will hold an event called “Socially Innovative Finland”, which will provide information about the country’s basic income experiment–launched on January 1, 2017, to much international publicity.
Maternity package, CC BY-NC-ND 2.0 Visa Kopu
The event will also include discussion of one of Finland’s existing social welfare initiatives: its internationally renowned maternity package, initiated in 1938, which provides all mothers-to-be with a package of child necessities, such as clothing and bedding (the box itself can be used as a crib).
Three members of Kela will speak:
• Olli Kangas (Director of Government and Community Relations): “Basic income – Part of tomorrow’s social security?”
• Marjukka Turunen (Head of Legal Affairs Unit): “How the basic income experiment works in practice”
• Olga Tarsalainen (Communications Specialist): “Finnish Maternity package – The best known brand of Finnish social security”
The event will take place on Thursday, January 12, 9:00-10:30 Finnish time (UTC/GMT +2), at Kela’s head office in Helsinki. It will also be broadcast live at the following page: https://videonet.fi/web/kela/20170112/.
Questions for the speakers can be submitted on Twitter during the event, using the hashtag #basicincome2017 or #maternitypackage2017. Questions may also be emailed in advance to Eeva-Kaisa Kivistö (firstname.lastname@kela.fi).
Complete details about the event are available from Kela: https://www.kela.fi/socially-innovative-finland.
Background: Finland’s Basic Income Experiment
On January 1, 2017, Finland launched an experiment in which 2,000 individuals will receive unconditional cash payments of €560 (about 590 USD) per month for two years. Test subjects were randomly selected from a pool of about 175,000 individuals between ages 25 and 58 and already receiving unemployment benefits from Kela, and those selected were required to participate. The main goal of the experiment, at present, is to determine whether unconditional cash transfers are superior to means-tested unemployment benefits with respect to promoting job-seeking and employment. However, Olli Kangas, leader of the research team behind the experiment, has recommended expanding the experiment to other target populations (including “other persons with small incomes” and individuals under age 25).
News of the experiment’s launch has been widely disseminated through international media, although some reports seem misleadingly to suggest that the Finnish government has actually decided to implement a basic income (or a basic income for the unemployed), despite the fact that the Finnish government is merely testing the policy, with any decision to implement a basic income for its citizens awaiting the conclusion and analysis of the experiment.
The latest information about the study can be found on Kela’s “Basic Income Experiment 2017-2018” webpage: https://www.kela.fi/web/en/basic-income-experiment-2017-2018.
For additional background on Finland’s basic income experiment, see these previous reports in Basic Income News:
Kate McFarland “Basic Income experiment authorized by Parliament” (December 18, 2016)
Kate McFarland “Kela’s report on Basic Income experiments released in English” (October 15, 2016)
Kate McFarland “Legislation for Basic Income Experiment Underway” (August 25, 2016)
Article reviewed by Danny Pearlberg
Cover Photo: Sunset in Helsinki, CC BY-NC 2.0 Giuseppe Milo
by Toru Yamamori | Jan 5, 2017 | Opinion
As we’ve reported here, the Finnish government is starting a two-year experiment on a basic income. When the government announced it in last August, a Basic Income News editor conducted a series of interviews in Finland. Summaries of those with the government and a long-term advocate, the Greens, and the Pirates were published here.
This is a longer version of the interview with Tapani Karvinen, who is a politician from the Pirate Party of Finland. He served as the chair of the party between 2014 and 2016. His response to the government’s press release on the experiment is here.
How did you come to know about UBI?
The idea of UBI was first introduced to me sometime 2012 through our political party. It gained instant support within our core members and was promptly adopted as a party statute.
What was your first thought on UBI?
I was intrigued by the simplicity and saw how it could correct most of inequality between students, small time entrepreneurs and various types of unemployment.
Has something changed after you first learned about UBI?
As my view on the matter has broadened, I see that we need wider transformation in our economic policies.
Why do you support UBI?
As they say, the simplest answer is probably the correct one. The simplicity of UBI would make the need for large institutes obsolete, and the tax-income would be shared to boost the economy, while giving equal opportunities to work for extra income for everyone, student, pensioner, unemployed or as entrepreneur.
What would you do if you had a UBI?
I’m an entrepreneur in a co-operative audiovisual company and do daytime work in a small business. UBI would enable me to do more income-taxed work.
Have you talked about UBI with your family and old friends? What do they say?
My parents have both owned small business and they do understand how UBI would make their lives less stressful, especially in those silent months, when income is not guaranteed.
How have you been involved with the Pirates?
I joined the Pirate Party of Finland in 2010, was elected as chairman of the party in 2014 and as vice-chairman in 2016.
What is your biggest priority in politics?
I see the Pirate agenda of sharing information as the key for everyone who wishes to improve themselves or seek knowledge for other reasons. There is a saying which illuminates it perfectly, “give man a fish, and he will eat a day. Teach him how to fish, and he will eat every day.”
How is UBI related to your important political agenda?
UBI enables people to act on what they see meaningful, without stress that those choices would cause economical catastrophe for them or their household. It gives opportunities for innovations, knowledge, arts, politics and just for caring thy neighbour.
What is your thought on the governmental initiative for UBI experiment?
I’m cautiously welcoming for the Finnish governments plan for UBI experiment. The greatest flaw I see in this experiment is that the saturation of UBI receivers is not strong enough to create work amongst group of friends, for example college classmates, who have idea that could be pursued, if it wouldn’t hinder their studies and student benefits. I would have preferred to see local study with high to full saturation of UBI receivers.
Let readers know more about yourself: where and when you were born, etc.
I’m 35 years old, born in eastern Finland (Heinävesi), from a small-business home. During last fifteen years I have worked several professions and for about dozen employers. Roughly put, I have worked five years as doorman for restaurants, five years in several IT-jobs and five doing pretty much everything from warehouse-worker to teaching. I have degree in computer sciences, and I have studied journalism and media-studies for few years.
The photo was taken by Hannu Makarainen.
