by Kate McFarland | Oct 7, 2016 | News
As previously reported in Basic Income News, Finland’s first international basic income seminar (BIST2016) was held in Turku on August 25. BIST2016 was organized by Varsinais-Suomen Piraatit (Southwest Finnish Pirates) in collaboration with BIEN Finland, the Pirate Party of Finland, and Pirate Youth of Finland.
Videos of the some of the lectures are available on YouTube, and copied below.
Ville-Veikko Pulkka: “Notes on the Finnish basic income experiment”
Summary:
In autumn 2015, the Prime Minister’s Office invited bids for a preliminary study (published on 30 March 2016) as part of preparations for a basic income experiment. After evaluation, a consortium led by the Finnish Social Insurance Institution, Kela, was appointed to study the suitability of different basic income models for the experiment.
The assignment outlined four different options to explore and develop:
1) full basic income (the level of BI high enough to replace almost all other benefits, perhaps excluding earnings-related benefits)
2) partial basic income (would replace most of the basic security benefits, but leave some)
3) negative income tax (“basic income” via taxation)
4) other possibilities to test basic income (the research group analysed participation income and the British Universal Credit, but these systems would not enable one to test the effects of basic income due to their conditionality).
Even though a budget-neutral partial basic income cannot automatically diminish income and unemployment traps, the model appears to be both economically and politically the most feasible one to test. According to power calculations made by the economists in our group, the sample for the experiment should be approximately 10,000 people in order to observe statistically significant results if the employment rate changes by two percentage points. In an ideal setting, the randomisation of people is compulsory and two-pronged. In addition to the treatment group, there must naturally be a control group.
The crucial factor is to have at least nationwide randomization since local experiments do not produce generalizable results. A representative, nationwide randomisation can be combined with more intensive local experiments to capture externalities. Also, weighted samples of interesting special groups are possible if the budget constraints can be tackled. Our research group recommends focusing on low-income households since the elasticity of labour supply is supposed to be greatest among this group and the budget is limited.
Ville-Veikko Pulkka is a researcher at Kela, the Finnish Social Insurance Institution, where he is a member of the research group that is preparing the country’s basic income experiment. Additionally, Pulkka is a PhD candidate at the University of Helsinki, writing a dissertation on “digital working life”.
Photo by Toru Yamamori
Christian Engström: “Basic income: a concrete and calculated proposal”
Summary:
This talk introduces a concrete proposal for a basic income system for Sweden, including a cost estimate and financing. The basic income would be 8.333 SEK (900 EUR) per month for anybody between 19 and 65 who lives in Sweden and has no other income. When you start earning money the basic income would be reduced, but never by 100%, so there is always an incentive to work if you can. The cost of this system would be covered in full by letting the basic income replace the current systems for social welfare, student aid and unemployment benefits, and removing the VAT discounts that certain industries enjoy. To make the proposal politically realistic, there would be no increase of income taxes, and no reduction of current sickness benefits.
Christian Engström is a member of the Swedish Pirate Party and, from 2009 to 2014, was a Member of the European Parliament.
Photo by Toru Yamamori
Albert Svan: “Basic income possibilities – based on informal studies from Iceland”
Summary:
In Iceland the Pirate Party is preparing a policy for implementing a basic income scheme. The debate started a couple of years ago when congressman Halldóra Mogensen proposed a legislation on basic income at the Icelandic Parliament. Some preliminary calculations show that 1/3 of the Icelandic government budget already goes to direct money transfers to Icelandic individuals and that a modest basic income amount for all persons 18+ years old will cost 2/3 of the budget, while a negative income tax may cost a similar amount as the current social financial aid. Of many prerequisites one initial observation is that basic income criteria should be calculated regularly and that a legislation of lowest allowed salaries must be somewhat higher than the basic income criteria.
Albert S. Sigurdsson currently works for Statistics Iceland. He holds a master’s degree in geography from the University of Helsinki, and has previously worked at the Finnish Environment Institute, Iceland’s Environment Agency, Lionbridge Technologies, and Futuvision Media.
Reviewed by Genevieve Shanahan
Turku photo CC BY-NC 2.0 Mikael Korhonen
by Kate McFarland | Oct 2, 2016 | News
The David Pakman Show — a progressive news and politics talk show based in the United States — has broadcast several segments on basic income, such as an announcement of Finland’s plans to test the policy and an interview with BIEN’s Jason Burke Murphy. Pakman himself is attracted to the idea of a basic income.
David Pakman’s latest video on the topic, published on September 1, is a critique of the latest plans for a Finnish basic income experiment, which Pakman says is “set up to fail” and a “bogus way” to test basic income:
In his criticism, Pakman focuses on the fact that Finland plans only to test the effect of the basic income on individuals who are already receiving unemployment benefits, rather than considering a representative sample of the population. He also identifies a tension between the main objective of the Finnish experiment — that is, to test whether a basic income can promote participation in traditional jobs — and the major theoretical justification of basic income as a way to adapt to changes in the nature of jobs and work.
Pakman is not alone in raising criticisms and concerns with the design and scope of Finland’s basic income experiment. See, for example, Toru Yamamori’s interviews with several experts on the experiments and members of the Finnish Green Party. Other critical responses — such as those of Leonid Bershidsky and Basic Income News editor-in-chief André Coelho — have focused on the fact that the experiment is to test only a “partial” basic income.
Reviewed by Dawn Howard
Cover image CC BY-SA 2.0 Lauri Heikkinen
by Toru Yamamori | Sep 23, 2016 | News
As we’ve already reported here, Finland’s Ministry of Social Affairs and Health announced their plan for the basic income experiment, and requested citizens’ opinions on it, on 25th August. We’ve also reported Finnish experts’ responses here, and the Greens’ response here. This article reports the response by the Pirate Party of Finland (Piraattipuolue).
The Pirate Party of Finland endorses an unconditional basic income. On the day the Finnish government announced their detailed plan, UBI advocates from the Pirates Parties of Finland, Iceland and Sweden gathered in Turku for a seminar on UBI.
Tapani Karvinen, the former chair of the party, responded to BIEN on the government’s plan:
Largest problem is that [the] experiment is going to analyze the employment of the target group, not other factors, such as health, participation in unpaid communal work, arts or self-development by studying or hobbies. Target group of 2000 people is inadequate, as the preliminary study suggested 2000 + 8000 whose basic income costs would have been covered from the Finnish Social Insurance Institute’s unemployment fund, therefore creating no extra costs for the study. Excluding students and state pensioners means that there will be no information if basic income will encourage creation of innovations, entrepreneurship and employment of graduates, or mental and physical health of elders.
In short, [the] study’s target group is not wide enough and is not analyzing all the crucial factors, which affect the well-being of individuals and therefore also economy and costs of state. A further study is necessary to complete the analysis of the effects which basic income would have to Finland as a whole.
Petrus Pennanen, the deputy chair of the party, also told BIEN about his views of the plan:
It just replaces the application based minimum unemployment / welfare benefit with a fixed payment, but doesn’t change the tax system in anyway. In a realistic UBI experiment small income would be taxed more than now. Not sure what is the point of the experiment, on one hand it’s certainly better something is being done instead of nothing, but I don’t think there’s much practical benefit from this kind of experiment. One could think it’s like a stalling tactic, waiting 2 years for this instead of actually implementing a sensible reform of our welfare systems.
The full interviews with Tapani Karvinen and with Petrus Pennanen will be published here at Basic Income News shortly.
[photo caption]
Tapani Karvinen on the right, Petrus Pennanen on the left. Photo is taken from a video provided from The Pirate Party of Finland.
Reviewed by Kate McFarland.
by Toru Yamamori | Sep 6, 2016 | News
MEP Heidi Hautala at the headquarters of the Green League in Helsinki
As we’ve recently reported here, Finland’s Ministry of Social Affairs and Health announced their plan for the basic income experiment, and requested citizens’ opinions on it, on the 25th of August. We’ve also reported Finnish experts’ responses here, including a critical remark by Osmo Soininvaara, a former Minister of Social Services from the Finnish Green League and a long-time UBI advocate. This article reports more detail of the Green League’s response (Vihreä liitto, the Green Party of Finland).
An unconditional basic income has been a part of the Green League’s platform since it was founded in 1987 by Soininvaara and others. The Green League published a detailed plan for UBI implementation in 2007. It was the first detailed plan for such a scheme by a political party in Finland.
On the 29th of August, we at BIEN visited the headquarters of the Green League in Helsinki. Heidi Hautala, a Member of the European Parliament, offered us a brief comment on the government’s experimental plan. Here is the video:
https://vimeo.com/181462278
After shooting the video, Hautala also noted the necessity of a European-wide move towards UBI.
Ville Ylikahri, one of the Green League’s experts on UBI, commented in a similar tone:
I think about the government’s basic income experiment the same way that Osmo Soininvaara and Heidi Hautala do: experimentation as such is a good thing but the risk is that the government’s badly designed experiment will be a reason to say afterwards that basic income doesn’t work. The experiment focuses too much on combining work income and social benefits, while it neglects all the other aspects of basic income. The main problem in this experiment is that it lacks taxation changes completely. But, saying that, I understand that any kind of experiment on basic income would be a hard thing to do.
Ville Ylikahri, second from right, at the headquarters of the Green League in Helsinki. Taken by Toru Yamamori
Ylikahri is a member of the Helsinki City Council and Secretary General of the green think tank ViSiO (The Green Cultural and Educational Centre). Ylikahri has published a book on UBI and has been involved in UBI research and the formation of both the party and ViSiO’s detailed UBI plans.
Outi Alanko-Kahiluoto, the Head of the Green Parliamentary Group, gave a statement about the government’s proposal here [in Finnish]. According to Ylikahri, the statement says:
The experiment won’t provide proper information about basic income, and the model without taxation changes is too expensive. The Greens have decided that we will continue to develop our own basic income model.
Reviewed by Genevieve Shanahan.
by Toru Yamamori | Aug 27, 2016 | News
Liisa Siika-aho (provided by herself)
As we’ve already reported here, Finland’s Ministry of Social Affairs and Health has announced their most recent move in a plan to launch a basic income experiment. On 25th August the Ministry canvassed for the Finnish public’s opinion on a bill regarding a basic income experiment. Here is a follow up with the Ministry’s comments and experts’ responses.
Liisa Siika-aho, director, Ministry of Social Affairs and Health responded to BIEN on 26th August as follows:
Q: What is the basic income experiment and what is its aim?
A: The basic income experiment is included in Prime Minister Juha Sipilä’s Government Programme. The experiment is one of the activities aiming to reform social security so that it better encourages participation and employment.
Q: Why is the basic income experiment carried out?
A: The objective of the legislative proposal is to carry out a basic income experiment in order to assess whether basic income can be used to reform social security, specifically to reduce incentive traps relating to working.
Q: How are the participants selected?
A: Persons receiving Kela’s unemployment-related benefits, under certain limitations, would be included in the experiment. From the target group, a test group of 2 000 persons would be selected by means of random sampling.
Q: Is it mandatory to participate in the experiment?
A: Participation in the experiment would be mandatory for those selected.
Q: When will the experiment start?
A: It is suggested in the legislative proposal that a basic income experiment will be carried out in 2017–2018.
Q: What would be the level of basic income in the experiment?
A: The level of basic income would be EUR 560 per month. Basic income would be tax free for the receivers.
Q: How is the experiment financed?
A: A total of EUR 20 million has been reserved in the budget for the basic income experiment.
In addition to this, the benefits that Kela is paying at the moment would be used as an addition for those persons who are receiving basic security benefits at the beginning of the experiment.
Q: Who is responsible for carrying out the experiment?
A: The Social Insurance Institution of Finland (Kela) would be responsible for carrying out the experiment.
Finland has a long history of advocating UBI (for a brief summery, see here). Here are those advocates’ Comments.
Jan Otto Andersson with an article in the Helsingin Sanomat (taken by Toru Yamamori)
Jan Otto Andersson, Emeritus associate professor at Åbo Akademi, has been advocating UBI since around 1980 and is a founding member of the BIEN (European Network at that time). On 26th August, he had this to say:
It is not a test for what a basic income for all in the society would mean, but for just to see how it affects those who have been unemployed. …. So it is limited but interesting. It will improve the discussion which has been here for a long time….It [my feeling on the experiment] is positive because this makes the idea more well known.
Osmo Soininvaara, a former minister of Social Services with the Finish Green League and another long term advocate of UBI in Finland, posted a harsh criticism on his blog on 26th August, where he calls the experiment as ‘such a stupid model’. His reasons were as follows:
……
In a proper BI model, the received basic income does not, indeed, get smaller when your income level rises, but taxation starts from the very first euro earned. That’s why a proper basic income does not bring net income gains to people in mid-income jobs.
In this experiment taxation is left untouched. If you get into a 4000 euro per month job, you will earn 560 euros more than the person doing the exact same job next to you. We cannot afford to increase the income level of every job earner by 560 euros per month.
In this regard, the model is guilty of the accusations levelled against BI by those people who do not understand who basic income is supposed to work.
…..
(translated by Otto Lehto)
Otto Lehto, the former president of the BIEN Finland, gave us his comments, which seems to have a more nuanced tone:
Feelings, as an individual and academic, formerly of BIEN Finland, can be summed up as follows: The research parameters are about exactly the sort of compromise that one would expect to emerge as a result of the recommendations of an expert coalition commissioned by a wide-ranging coalition government spurred to action by a vague and compelling sense that something needs to be done, but equally held back by the realization that many toes will inevitably be stepped on, and many special interests will need to be reconciled, before anything can be done. Change breeds fear, and fear breeds paralysis. To allay skepticism, the parameters are designed to be the least offensive to, and the smallest possible departure from, the established norms and expectations of the Finnish workfare/welfare-state. In particular, excluding young people and students is, in my opinion, a moralistic choice of little merit and little justification, but it makes sense as a compromise within the status quo, and as a precaution against the critics of “free money to lazy students.”
The budgetary constraints and time constraints are beyond Kela’s control, so the main fault lies within the government. They also set the original goals and parameters within which the labour market participation focus has been raised as the main criteria, with the predictable result that human right, liberty. equality and other considerations of social justice bent have been largely set aside, to the chagrin of many (myself included). This. however, is the state of things, and can only be changed in the next general election of 2019.
2000 participants is a small sample, but if the budget does not change, this cannot be helped. Limiting the sample to people on the government unemployment benefits makes nominal sense as a result of the government’s single minded focus. But it skews the experiment by excluding a number of potential beneficiary groups, including people on low-paying jobs, students, the self-employed, etc. This does not even make sense from the government’s own (limited) perspective, since labour market participation is a more complex notion than the old-fashioned distinction, reflected in the official unemployment statistics, between people who are “in” and “out of” work.
The taxation aspect is another potential disaster. If taxation cannot be changed to reflect the new benefit structure, this will inevitably make SOME recipients of basic income better off than their peers, while some of them will be worse off than their peers. Such a model, with its creation of a massive budget-deficit, cannot be generalized for the whole national economy, as Osmo Soininvaara, the father of the Greens’ basic income model, has written in his recent blog, very critical of the government’s/Kela’s proposal.
I am very skeptical this experiment will produce any really interesting scientific results, but it serves the function of satisfying the nominal requirements of the government’s plan, and the pressures from the various interest groups. It does not appear too radical, too left-wing, nor too right-wing. It might serve a useful purpose in propelling the basic income discussion forward. At the same time, many instances will probably try and use to it squelch any further discussion, too.
Beyond my own views, I will now say something about how this proposal has been received more generally. The overwhelming consensus among my own group of friends, representing multiple parties, left-wing and right-wing, those opposed to basic income as well as those in favour, is that the experiment seems disappointing in many respects, and perhaps even doomed to fail. (Some will conspiratorially add: consciously?) Many people, including opponents and skeptics, would like a more thorough, larger-scale and better designed experiment. The lukewarm success, bordering on failure, of the experiment, before it has even gotten off the ground, is a good indication of the difficulty of institutional change in our country. Good ideas become OK ideas, bad ideas become OK ideas, until we are left with nothing but OK ideas. So, yes, this experiment seems… OK.
Reviewed by Cameron McLeod.
