On Jan. 1, Finland began a social experiment to give €560 a month to the unemployed. It will last two years and will involve 2,000 out-of-work citizens chosen from among those who receive unemployment benefits.
The first of its kind in Europe, the Finnish experiment aims to reduce poverty, to increase the rate of employment and to measure the economic and social effects of an unconditional payout from the state. Beneficiaries will not have to justify the way they spend their money. The sum will be deducted from any further subsidies received.
The basic salary will be maintained, however, even if the recipient finds a job. One of the main problems among the unemployed Finns, says Olli Kangas, director of the governmental agency that deals with welfare, is the fear that accepting a job may cost them subsidies and benefits provided by generous welfare state. The unemployed often refuse low-wage and temporary jobs.
“It’s highly interesting to see how it makes people behave,” Kangas told the Associated Press. “Will this lead them to boldly experiment with different kinds of jobs? Or, as some critics claim, make them lazier with the knowledge of getting a basic income without doing anything?”
Kangas anticipates that in the future the experiment could be extended to other categories of low-income citizens, small business owners and part-time workers or temporary workers. The unemployment rate in Finland, a country of 5.5 million inhabitants, is about 8 percent, with 213,000 people out of work.
The basic income experiment is part of the measures sought by Prime Minister Juha Sipilä’s center-right government to increase employment. The average income in the private sector is about €3,500 per month.