Finland Set to Reveal Some Results of Its Universal Basic Income Experiment
For two years, the Finnish social security agency — KELA — has been giving 2,000 unemployed Fins 560 euro ($635.4) a month to test not only how much a basic income would improve their livelihoods, but whether these grants would have other ripple effects throughout the Finnish economy. On Friday, the initial results of the experiment will be announced, and could provide further evidence whether or not a universal basic income, or UBI, is as promising an anti-poverty measure as it’s increasingly made out to be.
To announce the findings, KELA plans to host a live stream beginning at 1:30 a.m. Eastern time. Three researchers will share their preliminary findings of the basic income experiment launched by Prime Minister Juha Sipilä in January 2017 and which ended on December 31 of last year. This will be the first of three announcements. A more in-depth report about the first year of the test will be published in the spring, and results of the entire experiment will be available in 2020.
The announcements will provide insight into the experiment’s effects on participants’ employment, income level, and overall wellbeing. It will also examine the public sentiment regarding universal basic income. Expectations are high: After all, tomorrow’s findings could close the book on an ambitious experiment that never quite reached its full potential, or it could help point the way to how UBI could one day become more commonplace.
United Nations Secretary Antonia Guterres and Indian political leader Rahula Gandhi are recent examples of public figures pushing toward UBI. But Finland’s experiment wasn’t quite what supporters of the concept have envisioned (though, to be fair, UBI could be implemented in any number of ways).
So why do some critics accuse the Finland experiment of coming up short? As Antti Jauhiainen and Joona-Hermanni Mäkinen, two Finnish economists focused on economic mobility pointed out in a NYT column, the experiment was initially drafted in 2016 and the plan was to pay participants 800 euro ($974). But as it began, officials decided that it was too costly for the Finnish government to afford, so KELA lowered the wage to $635.4, which is not a living wage in Finland.
The average monthly rent of one bedroom apartment outside of a city center is roughly $640, according to crowd-sourced consumer prices database Numbeo. As designed, the experiment seemed likely to incentivize these workers to go get back into the workforce, even if it meant taking part-time or low-paying jobs. This was also an effort to improve Finland’s 71 percent employment rate, according to a Bloomberg op-ed.
Whether it can truly be called an experiment in universal basic income, as opposed to say, what happens when you temporarily increase unemployment benefits a little bit, remains to be seen. Fortunately, it’s not the only entity investigating the matter. Non-profit YC Research also has a pilot that was initially supposed to pay $2,000 a month, though they also decided to reduce the benefit after the program experienced delays. There is also GiveDirectly, an American charity, that has launched a basic income initiative in Kenya giving 6,000 people about $20 per month for a year.
If tomorrow’s results are positive, KELA will almost certainly inspire a host of similar projects in the future. But even if it’s not, or if tomorrow’s report proves inconclusive, UBI advocates have got a lot of other irons in the fire.