Finland will hand out cash to 2000 jobless people to test universal basic income(nytimes.com)
nytimes.com
Finland will hand out cash to 2000 jobless people to test universal basic income
http://www.nytimes.com/2016/12/17/business/economy/universal-basic-income-finland.html
394 comments
Another limited duration trial (two years). What's the point? It's not going to measure the real effect. People will know it is going to run out and behave differently than if it was permanent.
What's to stop UBI from "cancelling itself out" due to inflationary effects?
Prior to UBI, the lowest possible income is zero. After UBI, the lowest income is X. The poorest people in the nation will have an income of X, so X becomes the new relative zero, the new baseline. Prices of everything (food, housing, whatever) will reset relative to X. So uni will become worthless shortly after it's introduced.... but only if it is truly universal.
Someone feel free to tell me if I'm missing something.
Prior to UBI, the lowest possible income is zero. After UBI, the lowest income is X. The poorest people in the nation will have an income of X, so X becomes the new relative zero, the new baseline. Prices of everything (food, housing, whatever) will reset relative to X. So uni will become worthless shortly after it's introduced.... but only if it is truly universal.
Someone feel free to tell me if I'm missing something.
Jobless people generally cannot earn additional income while collecting unemployment benefits or they risk losing that assistance.
Worst. Idea. Ever.
I know -- it's a common feature of income support systems, including here in the US.
I don't know whether UBI is going to prove workable or not. But even if it doesn't, if we could just redesign the systems we do have so they never give recipients a disincentive to work more, that would be a huge, huge improvement.
Worst. Idea. Ever.
I know -- it's a common feature of income support systems, including here in the US.
I don't know whether UBI is going to prove workable or not. But even if it doesn't, if we could just redesign the systems we do have so they never give recipients a disincentive to work more, that would be a huge, huge improvement.
>It will give them benefits automatically, absent bureaucratic hassle and minus penalties for amassing extra income.
That last part is huge. A disincentive to work by cancelling benefits is a feature of nearly every current system. It is extremely important that someone test a system without this in it to see how a people react.
This looks like a very important test for the viability of UBI.
That last part is huge. A disincentive to work by cancelling benefits is a feature of nearly every current system. It is extremely important that someone test a system without this in it to see how a people react.
This looks like a very important test for the viability of UBI.
Why don't we just cover everyone's basic needs and be done with it?
This is a pointless discussion. Just give everyone enough food, shelter, and free access to medicine. It'll create a society where we don't stress over losing a job because we don't know how we're going to get our food tomorrow.
The reason that some people think this "disincentiveces" people to work is that they'd have to pay higher wages and wouldn't be able to exploit human beings, as all capitalist systems do. That's it. That's their whole argument. The rest is just dressing it up with empty moral questions about "giving away the fish instead of teaching how to fish".
This is a pointless discussion. Just give everyone enough food, shelter, and free access to medicine. It'll create a society where we don't stress over losing a job because we don't know how we're going to get our food tomorrow.
The reason that some people think this "disincentiveces" people to work is that they'd have to pay higher wages and wouldn't be able to exploit human beings, as all capitalist systems do. That's it. That's their whole argument. The rest is just dressing it up with empty moral questions about "giving away the fish instead of teaching how to fish".
How is it "universal" if recipients are required to be jobless?
From a first cross-read, this article is bluntly discrediting UBI.
Starting with numbers: about 204M working age population in the US - hence the USD10K to each of them example would just make somewhere what is spend yearly for military and banks - the 8 times numbers cited in the article of what is spent today does not make any sense.
The linked article does not mention any amounts that Finland wants to provide to the 2k people - instead it is referring to Swiss calculations - last numbers I've heard with Finland were on par with current social security / poverty level pays (~EUR600 p/m) - this of course does not enable most of the key effects intended with an UBI (money into spending, freedom of choice for work etc) - it only continues the current system (with some potential savings within the administration).
To get a better understanding we have to at least repeat the Canadian experiments from the 1920s (proven that it is substantially beneficiary for the economy overall) - more money than poverty level, people must gain freedom by the possibility to live.
Given that soon a large proportion of people will not have a chance to find a job that will allow them to survive, we either go back to lords and serfs or actually look into potentially sustainable solutions.
Starting with numbers: about 204M working age population in the US - hence the USD10K to each of them example would just make somewhere what is spend yearly for military and banks - the 8 times numbers cited in the article of what is spent today does not make any sense.
The linked article does not mention any amounts that Finland wants to provide to the 2k people - instead it is referring to Swiss calculations - last numbers I've heard with Finland were on par with current social security / poverty level pays (~EUR600 p/m) - this of course does not enable most of the key effects intended with an UBI (money into spending, freedom of choice for work etc) - it only continues the current system (with some potential savings within the administration).
To get a better understanding we have to at least repeat the Canadian experiments from the 1920s (proven that it is substantially beneficiary for the economy overall) - more money than poverty level, people must gain freedom by the possibility to live.
Given that soon a large proportion of people will not have a chance to find a job that will allow them to survive, we either go back to lords and serfs or actually look into potentially sustainable solutions.
I agree with basic income, but most analyses of it are backwards.
For most of history, governments addressed unemployment by starting wars. By shipping off to war, the unemployed temporarily get a job. They either come back dead or ready to take a new job in an economy revitalized by the stimulus of government war spending.
John Maynard Keynes noticed this pattern, especially during the Great Depression and WW2, and made a brilliant suggestion: continue with these government interventions, but keep the government spending and drop the war part. We call it "Keynesian economics", but really, what Keynes invented was capitalist peace. And guess what, since then, no two countries that both had McDonald's had fought a war against each other since each got its McDonald's. [1]
We need a Keynesian boost today, not because of technological progress, but rather the contrary: the rapid technological progress of the 20th century that brought tremendous economic prosperity to humanity has finally come to a grinding halt. Let's stop denying this. The stream of lifechanging breakthrough inventions of the 20th century, from A (antibiotics) to Z (zippers), have ended. As a result, we now suffer from secular stagnation, something Keynes understood very well back then, and Larry Summers understands in the present. [2]
It's especially absurd to claim that automation is the cause of this. Automation has already upended society: it was called the Industrial Revolution and happened 200 years ago. The upheaval caused then to human lives and employment was far more dramatic than anything happening today.
And basic income is simply the most fair way to apply Keynesian policy. It is more fair to split the money up and distribute it equally to every individual than it is for the government to buy things on their behalf. Highly distributed spending will also avoid creating market distortions and liquidity traps. [3] And the resulting economic boost will lead to increased tax revenues and, who knows, maybe more jobs -- this time not subject to labor market distortions caused by people being desperate for work.
[1] https://en.wikipedia.org/wiki/The_Lexus_and_the_Olive_Tree [2] http://larrysummers.com/2016/02/17/the-age-of-secular-stagna... [3] https://en.wikipedia.org/wiki/Liquidity_trap
For most of history, governments addressed unemployment by starting wars. By shipping off to war, the unemployed temporarily get a job. They either come back dead or ready to take a new job in an economy revitalized by the stimulus of government war spending.
John Maynard Keynes noticed this pattern, especially during the Great Depression and WW2, and made a brilliant suggestion: continue with these government interventions, but keep the government spending and drop the war part. We call it "Keynesian economics", but really, what Keynes invented was capitalist peace. And guess what, since then, no two countries that both had McDonald's had fought a war against each other since each got its McDonald's. [1]
We need a Keynesian boost today, not because of technological progress, but rather the contrary: the rapid technological progress of the 20th century that brought tremendous economic prosperity to humanity has finally come to a grinding halt. Let's stop denying this. The stream of lifechanging breakthrough inventions of the 20th century, from A (antibiotics) to Z (zippers), have ended. As a result, we now suffer from secular stagnation, something Keynes understood very well back then, and Larry Summers understands in the present. [2]
It's especially absurd to claim that automation is the cause of this. Automation has already upended society: it was called the Industrial Revolution and happened 200 years ago. The upheaval caused then to human lives and employment was far more dramatic than anything happening today.
And basic income is simply the most fair way to apply Keynesian policy. It is more fair to split the money up and distribute it equally to every individual than it is for the government to buy things on their behalf. Highly distributed spending will also avoid creating market distortions and liquidity traps. [3] And the resulting economic boost will lead to increased tax revenues and, who knows, maybe more jobs -- this time not subject to labor market distortions caused by people being desperate for work.
[1] https://en.wikipedia.org/wiki/The_Lexus_and_the_Olive_Tree [2] http://larrysummers.com/2016/02/17/the-age-of-secular-stagna... [3] https://en.wikipedia.org/wiki/Liquidity_trap
tl;dr
Finland is going to selecting 2,000 unemployed individuals, at random, and offering them cash without strings. Current unemployment schemes, they believe, hold back individuals from finding part time work / any work because the benefits outweigh the job opportunities. They hope that this new scheme promotes people to take work and have an adequate safety net to prevent homelessness and hunger.
Finland is going to selecting 2,000 unemployed individuals, at random, and offering them cash without strings. Current unemployment schemes, they believe, hold back individuals from finding part time work / any work because the benefits outweigh the job opportunities. They hope that this new scheme promotes people to take work and have an adequate safety net to prevent homelessness and hunger.
What's the evidence that results of such study could be generalized to the entire population? I mean, yeah, 2000 people seem like a big group, but one might have different ideas about what to do with free money if the society around stays exactly the same vs when everybody else is also entitled to UBI. When I'm unemployed and look around and see all my friends work I might feel quite ashamed of myself and willing to change, but if all of them "retire" at 30 instead this might not be exactly the case.
This reminded me of the Y Combinator Basic Income project. The last I read about that was this: https://blog.ycombinator.com/moving-forward-on-basic-income/
I wonder what the status is?
What is that gonna achieve exactly? Aren't prices gonna just inflate upwards and things become less affordable?
If you just pay everyone X amount of money every month for whatever, it just means that in order to produce something you'll need to pay someone a lot more than that X amount in order to work and produce it and also it means that that item is gonna increase massively in cost in order to pay the items production itself.
I am highly against that idea.
You want to solve issues? Give free food/water and shelter for survival, thats all a human needs. It doesn't need to be a food from a chef or Evian water or a house with even an internet connection. All it needs is just to provide some safety that that person is not going to die of starvation or weather. Other than that if you want to have a better have and lifestyle well you have to work for it.
If you just pay everyone X amount of money every month for whatever, it just means that in order to produce something you'll need to pay someone a lot more than that X amount in order to work and produce it and also it means that that item is gonna increase massively in cost in order to pay the items production itself.
I am highly against that idea.
You want to solve issues? Give free food/water and shelter for survival, thats all a human needs. It doesn't need to be a food from a chef or Evian water or a house with even an internet connection. All it needs is just to provide some safety that that person is not going to die of starvation or weather. Other than that if you want to have a better have and lifestyle well you have to work for it.
Implemented on a big scale it'll lead to higher inflation and ultimately will increase stratification.
I could relate to the article. I'm currently living in Oulu, and was also working for a Nokia contractor until 2011. Unable to find work, I went back to polytechnic college for 3.5 years to update my skills and perhaps wait out the recession. Unfortunately, the situation hasn't gotten any better and my new bachelor's degree doesn't give me any advantage.
There are plenty of entrepreneurs requiring people of various backgrounds, but these are generally unpaid positions. I am currently writing a web-app for a charity, and have just launched a customised wordpress site for a new business. These are of course unpaid, and like the article states, it's not worth the risk of starting my own business (being a freelancer for example) as it would mean coming off benefits completely and hoping you'll make enough to pay for everything you need to pay for. UBA would suit me great. I could become that freelancer instantly, and with no fear. That company, who's website I just launched wanted to pay me, but legally it was impossible due to the reason I just mentioned (freelancing).
I'm also currently writing a language learning app, a mashup of my favourite features of DuoLingo and Memrise in my free time. Perhaps monetising that in some way may lead me out of this stagnation.
There are plenty of entrepreneurs requiring people of various backgrounds, but these are generally unpaid positions. I am currently writing a web-app for a charity, and have just launched a customised wordpress site for a new business. These are of course unpaid, and like the article states, it's not worth the risk of starting my own business (being a freelancer for example) as it would mean coming off benefits completely and hoping you'll make enough to pay for everything you need to pay for. UBA would suit me great. I could become that freelancer instantly, and with no fear. That company, who's website I just launched wanted to pay me, but legally it was impossible due to the reason I just mentioned (freelancing).
I'm also currently writing a language learning app, a mashup of my favourite features of DuoLingo and Memrise in my free time. Perhaps monetising that in some way may lead me out of this stagnation.
This is not UBI (universal basic income), this is re-branded welfare.
Instead of just giving people money our governments at federal / state / local levels should become employers of last resort for everyone who has exhausted their welfare or unemployment benefits. Guarantee 30 hours / week at minimum wage to anyone who wants to work. Even if it's just trail maintenance or graffiti cleanup they will at least be maintaining basic employment skills, and have enough spare time to retrain for something better.
Now, the Finnish government is exploring how to change that calculus, initiating an experiment in a form of social welfare: universal basic income. Early next year, the government plans to randomly select roughly 2,000 unemployed people — from white-collar coders to blue-collar construction workers. It will give them benefits automatically, absent bureaucratic hassle and minus penalties for amassing extra income.
The government is eager to see what happens next. Will more people pursue jobs or start businesses? How many will stop working and squander their money on vodka? Will those liberated from the time-sucking entanglements of the unemployment system use their freedom to gain education, setting themselves up for promising new careers? These areas of inquiry extend beyond economic policy, into the realm of human nature.
I am not a fan of the idea of universal basic income, but I would love to see the existing social safety net system get tweaked to be less retarded. I hope this experiment goes good places.
The government is eager to see what happens next. Will more people pursue jobs or start businesses? How many will stop working and squander their money on vodka? Will those liberated from the time-sucking entanglements of the unemployment system use their freedom to gain education, setting themselves up for promising new careers? These areas of inquiry extend beyond economic policy, into the realm of human nature.
I am not a fan of the idea of universal basic income, but I would love to see the existing social safety net system get tweaked to be less retarded. I hope this experiment goes good places.
It seems like we can learn so little by selecting only for jobless people. The best way to do a BI test seems to me to get a random sample so we can test how it affects people in various circumstances. Selecting a specific demographic like this seems more a political move than a scientific one.
A country with very good welfare like Finland is the worst place to test UBI, which is supposed to replace welfare.
I feel like we're creating a new government program to counter the failures of an existing one: education. If people had marketable skills, it would be a lot easier to find work. Perhaps tax revenue should go to education and training, instead.
I think we're a long way off from total automation of most industries.
I think we're a long way off from total automation of most industries.
The model selected maybe problematic.
A) There are additional benefits for helping to pay rent which are income dependent.
B) There are special circumstantial increases to benefits replaced by basic income, that state has to pay inorder to fill its constitutional equality requirements. For instance increases in unemployment for dependent children, expenditures for education program participation for unemployed...
Now testsubjects get them by applying for them. Whats potential problem is what it takes to LOOSE them, its a risk factor on every action to earn temporarily, or taking a risky move to try to start a business. Latter causes also a high risk at the end of experiment, unless you have folded it long before end of experiment.
> jobless
> universal
Doesn't sound very universal. One of the big factors that make it a good idea is that receiving the basic income shouldn't make you disincentivized from doing more and getting a job, etc. Otherwise, how is it different from existing welfare programs and such?
> universal
Doesn't sound very universal. One of the big factors that make it a good idea is that receiving the basic income shouldn't make you disincentivized from doing more and getting a job, etc. Otherwise, how is it different from existing welfare programs and such?
As many have noted, this is not UBI; full stop. Also, you can't "test" something that is supposed to be universal by definition, on a micro scale and to a selected subset.
I fully expect someone to claim this is completly different because of detail xyz, but this has been done before. It worked out better than expected.
http://www.npr.org/sections/money/2013/10/25/240590433/what-...
http://www.npr.org/sections/money/2013/10/25/240590433/what-...
And like all UBI experiments it will ultimately fail because UBI is essentially a form of theft.
Hiding behind the money illusion doesn't fool anybody for long.
https://medium.com/modern-money-matters/is-basic-income-basi...
Hiding behind the money illusion doesn't fool anybody for long.
https://medium.com/modern-money-matters/is-basic-income-basi...
Finland's population is 5.439 million, It may work for 2000 people but will it be workable and scale up to 10-million, 50-million or 100-million people? I believe the "square cube law comes into play.
Square cube law: https://en.wikipedia.org/wiki/Square-cube_law
Square cube law: https://en.wikipedia.org/wiki/Square-cube_law
What's stopping people from taking their universal income and moving to a different country with a lower cost of living. Do you you have to collect it in person? A UBI of $1-2K/month isn't that much in the western world but you could live like a king[1] in the third world.
[1]: Okay maybe not a very rich king but but you'd definitely be doing more than fine.
[1]: Okay maybe not a very rich king but but you'd definitely be doing more than fine.
Voters in Switzerland recently rejected a basic-income scheme
For a good idea of what this type of program can do to a society, take a look at the native Americans. The monthly allotment received by most only perpetuates very serious social problems. I know that most who will push for these types of programs have good intentions, but the outcome will probably prove to do more harm than good, generally speaking.
This is not a meaningless distinction -- one of the features of UBI is that it is universal. If this just goes to unemployed people we cannot see the change in behavior with people who are earning close to their reservation wage. Do they stop working?
This is streamlined rebranded welfare. Not a paradigm shift.