The European country would become the first with a universal basic income.
Image via Flickr user DG EMPL
Finland’s Social Insurance Institution, also called Kela, said last week it was considering a proposal to provide each and every Finn with an 800-euro ($870) payment each month. The policy change would make the northern European country the first in the world to provide a universal basic income to its citizens.
The tax-free monthly payment would replace all other government benefit payments, which Finnish authorities say could end up saving the country a boatload of money. At issue is unemployment: More than 10 percent of Finns don’t have a job, including 22.7 percent of younger workers, The Telegraph reports. However, there is strong disincentive for unemployed Finns to take temporary, low-paid work, which pays less than the country’s monthly welfare benefits. So Finland continues to dole out billions in monthly payments.
The tentative proposal seems to have popular support: A poll commissioned by Kela found that 69 percent of Finns support a basic income plan of about 1,000 euros a month. Finnish Prime Minister Juha Sipilä told The Telegraph that he supports the proposal. “For me, a basic income means simplifying the social security system,” Sipilä said.
It is less clear whether the plan would work. Bloomberg’s Leonid Bershidsky estimates that distributing the money to each and every Finn would cost 52.2 billion euros a year, while the Finnish government projects just 49.1 billion euros in revenue for 2016.
“There probably isn't much danger that Finns will stop working if they get a basic income,” Bershidsky writes. “The bigger risk is that the government won't be able to pay for it.”
The final Kela proposal won’t be released until November 2016, and officials said any universal income plan would be preceded by a pilot project.