Finland starts basic income pilot project

HELSINKI — Finland has become the first country in Europe to pay its unemployed citizens a basic monthly income, amounting to 560 euros ($787 Cdn), in a unique social experiment where the aim is to cut government red tape, reduce poverty and boost employment.

Olli Kangas from the Finnish government agency KELA, which is responsible for social benefits, said Monday that the two-year trial with 2,000 randomly picked citizens who receive unemployment benefits kicked off Jan. 1.

Those chosen will receive 560 euros every month, with no reporting requirements on how they spend it. The amount will be deducted from any benefits they already receive.

The average private-sector income in Finland is 3,500 euros per month, according to official data.

The trial aims to discourage people’s fears “of losing out on something,” Kangas said, adding that the selected persons would continue to receive the 560 euros even after receiving a job.

At present, a jobless person may refuse a low-income or short-term job for fear of having his financial benefits reduced drastically under Finland’s generous but complex social-security system.

“It’s highly interesting to see how it makes people behave,” Kangas said.

“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?”

The unemployment rate of Finland, a nation of 5.5 million, stood at 8.1 per cent in November with some 213,000 people without a job — unchanged from the previous year.

The scheme is part of the measures by the centre-right government of Prime Minister Juha Sipila to tackle Finland’s joblessness problem.

Kangas said the basic income experiment may be expanded later to other low-income groups such as freelancers, small-scale entrepreneurs and part-time workers.