Finnish government is considering scrapping welfare and paying everyone $10000 a year instead.
To fight poverty and boost its own economy, Finland is planning to issue a check for $876 to every citizen, every month. The concept is called basic income, and the Finnish government is getting closer to finalizing its implementation.
There is no income testing, no lengthy application process, needless bureaucracy is slashed, and you can earn as much — or as little — as you like on top of this, without adjustments or penalties.
Finland, which has a high 10% unemployment rate, would be the first country in Europe to just cut everyone a check. The universal basic income would go to every citizen regardless of how much money he or she makes.
Basic income has been debated by economists for years, but Finland would be the first major nation to actually implement the model on a universal basis.
Currently in Finland, just as in the U.S., welfare benefits are doled out based on income. Basic income, in contrast, would be equally distributed to everyone regardless of how much money they make or even if they don’t receive any other income.
Critics argue that basic income would remove the incentive to work and lead to even higher unemployment. Supporters point to previous experiments, such as the Canadian city of Dauphin, where basic income was enacted successfully in the 1970s. Residents of Dauphin were part of a program initially designed to evaluate if writing checks to the working poor, just enough to bring them up to a living wage, would eliminate their desire to work. It didn’t. Checks were written to the city’s poorest residents for five years with no strings attached, and for five years, poverty was eradicated.
Olli Kangas, Research Director at Kela, is designing and running the experiment. He explains that the idea itself came from the country’s new Government, in place since last May.
“Through this experiment, the Government wants to explore how to diminish, and possibly abolish, the work disincentives and income traps which it thinks weakens the present social transfer system in Finland,” Kangas explains.