Fin­land’s free cash for job­less fails to get peo­ple into work

The National - News - - NEWS / WORLD - SHAFI MUSADDIQUE

A two-year trial by Fin­land’s gov­ern­ment, in which 2,000 job­less peo­ple aged 25 to 28 were given a monthly pay­ment of €560 (Dh2,331), failed to cre­ate more em­ploy­ment.

A re­port on the Nordic coun­try’s Ba­sic In­come Ex­per­i­ment, pub­lished on Fri­day, re­vealed that the hand­outs – which came with­out con­di­tions – did not lead to more peo­ple tak­ing up work.

How­ever, the health and well-be­ing of re­cip­i­ents fared bet­ter com­pared to those who did not re­ceive the al­lowance.

“Those with ba­sic in­come had less stress and con­cen­tra­tion and health prob­lems than in the con­trol group. They also re­lied more strongly on their fu­ture and their so­cial po­ten­tial,” said Minna Ylikanno, se­nior re­searcher at the gov­ern­ment’s so­cial se­cu­rity agency, Kela.

Re­searchers de­nied that the find­ings – which cov­ered only the first year of the trial – were not con­tra­dic­tory, as in­creased well-be­ing could have pos­i­tive long-term ef­fects but lit­tle im­pact on em­ploy­ment prospects in the short term.

Re­sults for the sec­ond year of the scheme are due in 2020.

Fin­land’s per­sonal in­come tax rates av­er­aged 51.6 per cent last year, con­tribut­ing to a cul­ture of wealth re­dis­tri­bu­tion that en­joys strong pop­u­lar sup­port.

Back­ing for the scheme swept the globe, with sup­port­ers sug­gest­ing uni­ver­sal ba­sic in­come could be a bul­wark against re­dun­dan­cies forced by the rise of ar­ti­fi­cial in­tel­li­gence.

Y Com­bi­na­tor, a tech com­pany in Silicon Val­ley, has plans for a $60 mil­lion (Dh220.35m) project to pro­vide ba­sic in­come for 3,000 Amer­i­cans. Ad­vo­cates of the plan in Bri­tain be­lieve poverty could be erad­i­cated if the scheme were to be in­tro­duced there.

Bri­tish re­searchers think giv­ing £12,000 (Dh57,000) on top of the salary of a min­i­mum-wage worker (about £14,000), could lift them from the bot­tom 10 per cent of earn­ers to av­er­age in­comes.

“Higher in­comes are associated with bet­ter phys­i­cal and men­tal health out­comes, a lower like­li­hood of com­mit­ting a crime and lastly bet­ter out­comes for chil­dren at school,” Bri­tish think tank, the Cen­tre for So­cial Jus­tice, said.

Face­book founder Mark Zucker­berg, in­ven­tor of the in­ter­net Tim Bern­ers-Lee and Tesla’s Elon Musk also sup­port the uni­ver­sal in­come idea.

Sup­port for the pay­ments has grown in the US. Al­most half of Amer­i­cans ap­prove of the idea of in­tro­duc­ing ba­sic in­come. Eleven years ago, barely a tenth of Amer­i­cans sup­ported it.

Guy Stand­ing, co-founder of the Ba­sic In­come Earth Net­work, re­jected claims it would make peo­ple lazy.

“It’s an in­sult to the hu­man con­di­tion,” Mr Stand­ing told the World Eco­nomic Fo­rum in Davos, Switzer­land last year.

“Ba­sic in­comes tend to in­crease peo­ple’s work rather than re­duce it.”

Push­ing through po­lit­i­cal sup­port in the US could be dif­fi­cult.

“Any­thing that sounds like wel­fare gets a much more neg­a­tive re­ac­tion from Repub­li­cans,” said Frank New­port, editor-in-chief of poll­sters Gallup.

A ma­jor rea­son be­hind Repub­li­can op­po­si­tion could be the tax­a­tion needed to fund such pay­ments or equiv­a­lent state wel­fare.


Fin­land has a cul­ture of high tax­a­tion – the av­er­age per­sonal rate is 50 per cent – and pop­u­lar sup­port for wealth re­dis­tri­bu­tion

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