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 Andre Coelho | Sep 2, 2016 | Opinion
Finland’s Ministry of Social Affairs and Health has just published a press release, announcing an experiment based on a partial basic income (< 800 €/month), instead of a full basic income (> 1000 €/month). Although the latter had also been considered for the experiment, it appears that the government has decided that the experiment should be conducted as a partial basic income, specifically 560 €/month. Here are the reasons for which Kela decided to recommend against running the trial with a full basic income:
- It would imply higher taxes;
- It would result in lower earnings-related contributions to unemployment and pension funds;
- Low income earners might quit contributing to unemployment funds and joining trade unions.
Let’s address each of these points:
- Kela links the higher tax rates with the “incentives for work”. The argument is that the former will lead to a reduction in the latter. Why? Ok, so a person on a job will pay more taxes. Assuming these taxes are maintained under reasonable levels, why is Kela assuming these people will stop working? Kela assumes a purely economic standpoint here – meaning that, according to Kela’s logic, people’s decisions, and particularly those related to work, result exclusively from monetary arithmetic. This logic, ironically, is completely non-economical in nature. Kela is assuming that people’s interests, preferences, and particular drives to do things for reasons other than money are not important, and hence can be discarded. Furthermore, Kela assumes that the possible effects of these preferences and drives on the experiment are not even worth trying to capture or understand. Stripping the argument from its technicalities and white-collar language, it can be reduced to the most common, basic, and prejudice-laden argument against basic income: that with a (full) basic income, people will stop working (“the laziness argument”). Nothing about the nature of the work itself is mentioned – such as whether it is socially useful or not, or whether it is contributing or not to people’s sense of belonging and happiness. The only thing that concerns Kela’s officials, analysts and institutional partners is whether a person stays on the job (whatever that job may be): if he/she does (or if an unemployed person becomes formally employed), that’s great; if not, that’s bad. Let’s not forget this is an experiment. If doubts exist, it’s precisely by undertaking an experiment that we might understand more about the subject being tested – in this case, ourselves. If the experiment is only intended to confirm what we already know, then it’s not an experiment: it’s a purposeless act taken only to gain collective confidence, much closer to public relations than science.
- Kela’s second argument goes like this: if people receive a full basic income, then why would they bother saving for unemployment and pension funds? Of course, these savings would be nonsensical at amounts lower than the basic income. But if someone has an average income above the basic income threshold, then a certain amount of unemployment and/or pension saving could be a wise investment, in order to maintain the same level of earnings in case of unemployment and retirement. For sure, this implies that, overall, there would be reduced contributions to unemployment and pension funds. But would that be a bad thing? After all, with the existence of a full basic income, people’s need for unemployment or retirement security would be reduced, so these funds wouldn’t need to be as large as they are today. Anyway, unemployment and pension funds are composed of money belonging to those who have directly contributed to them (or they are supposed to be). So they should only be as large as those people’s need for them. So what if a person stops paying their contribution to unemployment and/or pension funds because now he/she has a basic income? Nothing really happens, other than that the person will have a smaller amount of money to draw from when he/she becomes unemployed or retired. However, that person would never sink below the basic income level, and so a basic safety would always be in place.
- The first part of Kela’s third argument has already been dealt with in our second point. So, the remaining question is just about unionization. Why does Kela assume that joining a union is so important—so important, in fact, that a decrease in union membership could justifying not even testing a full basic income? Trade unions represent a certain kind of vision about work which is declining. In the USA, in the last fifty years, trade union membership has declined from around 33% (of all employees) to about 10% nowadays (Planet Money, 2015). Also in the UK, the number of registered union members has sharply declined in the last 35 years, from 13 million in 1979 down to 6.4 million as of 2014. A moderate to strong reduction in trade union membership has occurred in most other European countries as well, including Finland (Henrique de Sousa, 2015). At the same time, self-employment has been on the rise in several countries (e.g.: Austria, Belgium, Ireland, UK, Netherlands, Czech Republic, Finland)– although, in the European Union overall, it has stabilized around 16.7% since 2008 (World Bank). The vision of work that the trade unions represent includes fixed working periods, clear employer/employee relations, fixed negotiated incomes (collective bargaining), and holiday arrangements. All of these are getting less relevant as the time goes by. This comes with the acute rising of work flexibility, uncertainty over work periods and earnings, and the increase of precarious working conditions (Guy Standing, 2011). Precarity, unions’ number one enemy, does not necessarily represent a problem if a full basic income is in place. Unions were formed to give workers collective bargaining powers over wages and working conditions; in their absence, the threat of destitution was constantly used by employers to retrain and control workers. The employers could push less favourable deals onto workers, who were forced to choose between a bad deal and poverty. But this relationship, based on employees’ fear and employers’ abuse of power, need not exist – and, under a full basic income, would not exist. This makes sense because individual workers would have the personal bargaining power that a full basic income brings. Being part of a trade union would thus cease to be a necessity, and turn into a mere preference. So, reduced unionization is no grounds for rejecting implementing a full basic income, let alone merely experimenting with one.
Kela is rejecting a full basic income out of fear. This is an experiment. Of course there are issues, but that is exactly why the experiment is needed in the first place: to look at the extent of the consequences, within a controlled setup, before any full implementation. And experiment is needed to study the effects, expected or not. And to observe changes in people’s behaviours, when they are able to enjoy (during the experiment’s limited timeframe) a larger degree of freedom that they have never experienced before. I, for one, think that it’s entirely worth it. For the future of Finland – and of humanity.
More information at:
In Finnish:
Olli Kangas & Ville-VeikkoPulkka (eds.), “Preliminary report on a universal basic income”, Prime Minister’s Office, March 30th 2016
In English:
Ministry of Social Affairs and Health, “Ministry of Social Affairs and Health requests opinions on a basic income experiment“, Sosiaali-Ja Terveysministeriö; August 25th 2016
Planet Money, “50 years of shrinking union membership, in one map”, February 23rd 2015
Department for Business Innovation & Skills, “Trade Union Membership 2014 – statistical bulletin”, June 2015
OECD Data, Self-employment rate (% of employment, 1990 – 2015)
World Bank, Self-employed, total (% of total employed)
Guy Standing, “The Precariat: the new dangerous class”, Bloomsburry Open Access / Creative Commons, 2011
In Portuguese:
Henrique de Sousa, “Sindicalização: a vida por detrás das estatísticas [Unionization: thelifebehindthestatistics]”, WorkingPaper, Faculdade de Ciências Sociais e Humanas, September 2011
Article reviewed by Ali Özgür Abalı, Kate McFarland and Tyler Prochazka.
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.
by Toru Yamamori | Aug 17, 2016 | News
Pirates of Southwestern Finland is hosting a workshop and seminar on Basic Income in Nordic countries, with the support of Basic Income Earth Network (BIEN) Finland, Pirate Party of Finland and Pirate Youth of Finland.
Time:
Thursday 25.8.2016, 14.00 – 18.00
Venue:
Vanha Raatihuone (Old City Hall)
Vanha Suurtori 3, Turku, Finland
At the workshop, BIEN Finland will facilitate four group discussions on the theme of ‘UBI for (enhancing of ) Nordic cooperation’, .
Confirmed speakers at the seminar are:
Ville-Veikko Pulkka, from The Social Insurance Institution
Albert Svan, Pirate Party of Iceland
Christian Engström, Pirate Party of Sweden
Jouko Hemmi, BIEN Finland
Tapani Karvinen, whom BIEN contacted about the event, told the Basic Income news team:
We hope that our seminar will broaden the basic income discussion by showing what’s happening at the moment in Nordic countries.
Iceland, Sweden and Finland are all having a serious thought about fixing social security, at least in part, by basic income. Leading countries will be first to see what to do and what not, so sharing that information without borders will bring the threshold lower in other states to consider basic income – which in turn, will accelerate the discussion further.
The detail can be found at:
https://varsinais-suomi.piraattipuolue.fi/basic-income-seminar-2016/
https://www.facebook.com/events/1009751985812851/
