Finland’s free money experiment remains on track

Deliveroo delivery service workers from Belgium and Netherlands protest against their working conditions, in Brussels, Belgium, 27 January 2018. Courier riders of food delivery service Deliveroo gathered protested against their working conditions. EPA-EFE/STEPHANIE LECOCQ

The biggest social policy experiment in managing the gig labour market is still worthy of global attention


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Finland’s basic income experiment – also referred to as “free money” – was pronounced dead by a number of media outlets on Wednesday, including CNBC. By Wednesday evening the organisers were making clear that the experiment is alive, if not entirely kicking.

The result was to reanimate attention for a social experiment exploring how society can transit to a labour market environment in which “gigs” will be the norm.

The Universal Basic Income (UBI) experiment was launched in 2016 by Finland’s Social Insurance Institution (Kela). The idea is to hand out €560 a month to 2,000 unemployed individuals aged 25 to 58 for a period of two years, even if they found a part-time or full-time job during that period. That would be ‘free money’ with no strings attached. The hypothesis is that the unconditional stipend provides a dependable safety net that helps people to plan their lives in the context of a proliferating gig-economy culture.

The full results of the experiment are expected by the end of 2019.

The question was whether this income support would have a lasting impact on their assimilation in the workplace, as compared to traditional unemployment benefits. The experiment aims to address scenarios of mass job loss with the advancement of robotics. The UBI project has high profile advocates, including Tesla’s Elon Musk and Nobel-prize-winning economist Angus Deaton.

According to the director of the UBI programme, Olli Kangas, the misunderstanding stems from the Finnish government’s decision not to scale up the programme, offering reassurances that the pilot is running as scheduled.

However, the UBI experiment has also been undermined by a recent OECD report. The developed economies think-tank suggests that scaling up the experiment to the whole population would increase absolute poverty in Finland from 11,4% to just over 14% in Finland, not least because it would require an income tax rise of 30% to support it.

A 2016 referendum in Switzerland rejected the idea of introducing a basic income.

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