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 Kate McFarland | Aug 25, 2016 | News
Finland’s Ministry of Social Affairs and Health has drafted a bill proposing a basic income experiment to test the effects of unconditional cash payments on work incentives.
According to a press release dated August 25, the bill recommends that a basic income experiment be conducted in Finland from 2017-2018, under the guidance and direction of the Social Insurance Institution of Finland (Kela). This is consistent with previously announced plans [1].
Under the proposed experiment, Kela will provide a basic income of 560 EUR per month (equivalent to about 630 USD), exempt from taxation, to 2000 individuals who are currently receiving unemployment benefits. The sample will be randomly selected from a pool of current beneficiaries of unemployment-related aid. To prevent selection bias, participation in the basic income scheme will be mandatory for those selected.
A control group will also be drawn from this population; individuals in the control group will continue to receive their typical unemployment benefits.
According to the press release, the primary objective of the experiment is “to obtain information on the effects of basic income on the employment of persons”. In particular, the government is interested in determining whether basic income effectively reduces the incentive traps associated with means-tested benefits (e.g., unemployment benefits that are lost once the recipient finds a job). The government’s hope is that basic income will encourage more individuals to accept jobs.
Given the primary concern with employment effects, students and elderly persons are to be excluded from both the experimental and control groups.
Although the experiment is designed to test the effect of basic income on work incentives, the Finnish government is also interested in basic income as a way to “reduce bureaucracy” and to “simplify the complicated benefits system in a [financially] sustainable way”.
The amount of 560 EUR per month was chosen to ensure that no individuals would endure a net loss in support under the basic income trial. According to an article in Yle, “A full basic income that would replace existing earnings-related benefits would not be politically or economically feasible” [1].
Jurgen De Wispelaere, a basic income researcher at the University of Tampere, has provided the following commentary on the announcement:
The draft bill released today by the Ministry of Social Affairs and Health signifies a crucial next step in the development of the Finnish basic income experiment. We now not only have a clear commitment from Juha Sipilä’s government that they are proceeding with piloting the first nation-wide basic income scheme. The proposed legislation also clearly sets out the parameters of the proposed pilot scheme, which was the topic of quite a lot of speculation in the media. Assuming the bill is approved by the Finnish Parliament and it passes the scrutiny of the constitutional committee, Olli Kangas and his research consortium will spend the next months working out many practical issues to ensure the experiment can kick off as planned in 2017. For basic income advocates, however, continued engagement with key political stakeholders in Finland remains a must. This is merely the start of a political process towards a universal and unconditional basic income in Finland.
The Ministry of Social Affairs and Health will hear opinions on the proposed legislation until September 9. After this date, it will submit the proposal to Parliament. If passed, the act authorizing the experiment will go into force on January 1, 2017.
The official press release (in English) is available online:
Ministry of Social Affairs and Health, “Ministry of Social Affairs and Health requests opinions on a basic income experiment“, Sosiaali-Ja Terveysministeriö; August 25, 2016.
Olli Kangas, Research Director at Kela, has also written a blog post covering the announcement (in Finnish). In the post, Kangas explains that a partial basic income, as selected for the experiment, was the only feasible model given budgetary and time constraints.
“Kokeilulaki osittaisesta perustulosta lausunnoille“, Kela; August 25, 2016.
[1] See, for example, these previous Basic Income News stories:
Vito Laterza, “FINLAND: Basic income experiment – what we know” (December 9, 2015)
Will Wachtmeister, “FINLAND: The world’s first country with truly experimental governance” (December 18, 2015)
Kate McFarland, “FINLAND: KELA has sent preliminary report to Prime Minister” (April 5, 2016)
[2] “Basic income pilot takes shape – mandatory participation for 2,000 unemployed“, Yle; August 25, 2016.
Reviewed by Robert Gordon
Photo (“Three Smiths” statue in Helsinki) CC BY-SA 2.0 Rob Hurson
This basic income news made possible in part by Kate’s supporters on Patreon
by Kate McFarland | Aug 25, 2016 | News
Another course on basic income, “Universal Basic Income: New Avenues in Social Welfare Policy”, is coming this autumn to the School of Social Sciences and Humanities at the University of Tampere in Finland.
According to the course description:
The course outlines the main characteristics of basic income and explores how it differs from traditional income support policies. In addition, the course provides a critical overview of the reasons for and against a basic income as well as reviewing a number of practical and political challenges that need to be overcome. Finally, the course offers a series of lectures that focus on basic income in the Finnish context, including an updated account of the ongoing preparation for the basic income experiment scheduled to start in January 2017.
Antti Halmetoja, a doctoral student at the university, is coordinating the course, which will feature a series of lectures by faculty and guest lecturers (see the linked webpage for a list). Halmetoja is also a member of the team planning Finland’s basic income experiment.
The University of Tampere’s most recent course on basic income took place last spring. Presentations and videos of many of the lecturers are available on the course website.
The first basic income course at the institution was held in the spring of 2015.
More information about the upcoming course is available here.
University of Tampere photo CC BY-NC 2.0 Mika Hirsimäki
Reviewed by Genevieve Shanahan
This basic income news is made possible in part by Kate’s supporters on Patreon.
by Kate McFarland | Aug 22, 2016 | News
A recent episode of the Asia & The Pacific Policy Society’s Policy Forum podcast examined the benefits and costs of basic income.
In the episode, editor Martyn Pearce interviews a series of four experts on the topic: Guy Standing, economist at the University of London’s School of Oriental and African Studies and co-founder of Basic Income Earth Network; Charles Murray, W. H. Brady Scholar at the American Enterprise Institute; Peter Whiteford, Director of the Social Policy Institute at the Australian National University; and Olli Kangas, researcher at KELA, the group planning Finland’s basic income experiment.
Guy Standing speaks about a multitude of issues, including the immediate need of a basic income to prevent the rise of “neo-fascist populists” and the justification of basic income as a type of public inheritance, which is owed to everyone due to the collective contributions of our forebears. Standing also describes possible models to introduce a basic income, such as beginning with a small social dividend alongside current welfare programs. Near the end of the interview, he provides an extended argument against the charge that a basic income “will make people lazy”.
Next, Charles Murray delivers quite different views on why a basic income is necessary and what a model of basic income should look like. Murray stresses that, on his proposal, a basic income “would replace the entire welfare state; it would not be an add-on” — and that the amount would be low enough that no individual could live alone in “splendid isolation”, encouraging employment and cooperation (combining resources).
Peter Whiteford, the third interviewee, briefly overviews the popularity of the idea of basic income in Australia, before turning to address two major arguments against basic income: that it is too expensive and that it would discourage (paid) work.
Finally, Olli Kangas discusses many details related to Finland’s upcoming basic income experiment — including Finland’s decision to test only a partial basic income, the structure of the experiment, and what is being tested (spoiler: primarily the effects on employment).
Listen to the full episode here:
Martyn Pearce and Peter Whiteford, “A basic income, or the end of welfare?” Asia & The Pacific Policy Society, Policy Forum; July 15, 2016.
Photo CC Slilin
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/
