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Europe Is Conducting Social Experiments On Basic Income

Will the U.S. do the same?

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Europe Is Conducting Social Experiments On Basic Income
BBC

Free stuff. We all like free stuff: food, clothes, gifts, etc. One thing that we probably like getting for free, without working or having to earn it, is money. Everyone likes getting money for free. However, many people have to work and have a job in order to earn money.

But what if you didn't have to do anything to earn money? What if you knew you would receive a guaranteed basic income?

Guaranteed basic income is when "citizens or residents of a country regularly receive an unconditional sum of money, either from a government or some other public institution, in addition to any income received from elsewhere," and Finland wants to implement it.

Finland is not the first country to propose the idea.

In the mid-to-late 70s, Canada did its own social experiment regarding the idea. Known as the "minicome," this experiment was conducted in Dauphin, a city in Manitoba, Canada.

If one's income fell below a certain line, then that citizen of Dauphin would be eligible for receiving benefits. For example, a family of four could receive the equivalent of $15,000 a year.

However, a final report was never written. The question remained unanswered: Could you financially support low-income citizens without getting rid of the incentive to work?

Economist and Professor at the University of Manitoba Evelyn Forget sought to find the results of the experiment.

By looking through data on employment, education and health from the area, Forget could compare those who received the benefits to other low-income in other towns.

In one Freakonomics podcast, Forget explains what she finds, as well as answering the question above.

"Grown-up people with full time jobs don't actually reduce the number of hours they work by very much," said Forget.

The Canadian social experiment showed that people didn't just quit their jobs. In any discussion about a guaranteed basic income, this is the primary concern.

More recently, in 2013 there was a vote in Switzerland for a basic income of 2,500 francs per month (about $2,800) for adults. It did not pass.

What is Finland's plan?

The two-year program, which began January 1, will aid Finland's unemployed ages 25 to 58. They will receive 560 euros, roughly $594, per month and will still be paid even if they find a job.

An article in March 2016, why the participants will be receiving what that particular amount:

"That sum, roughly equal to the unemployment and welfare assistance that covers food, personal hygiene, clothing and other daily expenses, would be supplemented, when necessary, with earnings-related benefits like housing allowance."

Also, the participants who will receive the income will be paying it back by means of a higher income tax.

Why is Finland doing this?

The country came out of a three-year recession in 2015. This universal income is part of the plan to cut spending. Furthermore, according to Finland's Social Insurance Institution, KELA, the goals are to reduce poverty, red tape, unemployment and encourage working.

Finland is not the only country conducting a socio-economic experiment. Other countries in the Netherlands, as well as across the Atlantic in Canada, will be studying the effects of a guaranteed basic income.

Why now? Why are countries finally devoting resources into finding out how society changes when people are given "free" money?

The answer may reside in technology.

Technology has made everyday life easier, and it will continue to do so. But at what cost? For example, self-driving cars, while not close to perfect, are becoming a more realistic dream. What will happen to all the taxi, uber, chauffeur and truck drivers?

Of course, that is just a hypothetical of course. There is no way to know what will happen in future.

However, there is something that can be predicted about the future. The United States is not even close to attempting an experiment that implements this idea.

The results of November's election showed that the House, Senate and President are all conservative. A guaranteed basic income is not something on the republican's agenda, not by a long shot.

In two years, when the Finland social experiment conclusions are being determined, even if they yield positive outcomes from economic, social and political standpoints, the United States will not attempt this.

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