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Finland and a case study of basic universal income

Finland has become the latest country to start trials of a basic universal income (BUI)

Under the pilot scheme, 2,000 unemployed men and women aged between 25 and 58 will receive a guaranteed €560 (about £485) per month for the next two years.

The participants will continue to receive the income even if they find work, with the government hoping this will encourage people to start their own businesses, take on part-time work or receive training in new areas.

The idea of a basic universal income has been around for quite some time. It was first mooted in the 18th century by radical Thomas Paine, who proposed giving every 21-year-old a grant of £15, funded via a landowner tax.

Recent concerns have raised the issue to the fore, with forms of BUI currently being trialled in Italy and the Netherlands in addition to Finland. Here in Britain, the Scottish government is considering implementing pilot schemes in Fife and Glasgow.

Finland is an ideal place for such an experiment, being a country generally regarded as being at the forefront of social innovation.

Pirkko Mattila, the country’s minister for health and social affairs, hopes the scheme will make it easier for the unemployed to start new businesses, take short-term or part-time jobs, and avoid the complications around declaring temporary sources of income.

The idea of a basic universal income is gaining support from a growing band of entrepreneurs, politicians and policy strategists from around the world, and from both ends of the political spectrum. Enthusiasts include French Socialist party member Benoît Hamon, South African-born business magnate Elon Musk, and American political commentator Robert Reich.

Most of the supporters believe a BUI could be the answer to some of the modern world’s most pressing problems, including a growing inequality of wages, the disintegration of the welfare state, and an increase in low-paid and exploitative jobs.

The experts point to how, at present, a large proportion of the welfare budget is spent on supporting people in low-paid jobs that do not allow them to adequately clothe and feed their families. A basic universal income, they say, would go a long way to alleviating this problem.

Others believe a BUI could help to address the issue of increased automation. At a time when it is predicted that a considerable percentage of jobs could be replaced by robots and machines, such as driverless vehicles, there are concerns about how many jobs will be available in the future and how those pushed out of work will cope.

Other experts are not convinced that a BUI will provide the benefits it promises. Their biggest concern, of course, is how such a large sum will be funded. Although recent polls show the majority of adults in Europe back the idea, not many of them support an increase in taxes to fund it.

Others worry about engendering a culture of worklessness, or a lack of ambition, if everyone gets a basic wage regardless of whether they work.

Perhaps the pilot schemes will give us a better idea of the practicalities and implications of such a major sea-change in wage policy.

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