Fridi (luvdovz) wrote in talk_politics,
Fridi
luvdovz
talk_politics

About that 560 euro safety net

As I wrote a while ago, Finland has started a bold experiment: they'll be granting 2000 random unemployed Finnish people with a guaranteed minimum income until the end of 2018 (the monthly amount has been set at 560 euro now). So what are the results as of today, a couple months later? Let's see.

The liberal-conservative government has started this experiment not out of curiosity, or love for experimentation, but out of necessity. Because Finland still hasn't completely shaken off the economic crisis, unemployment is high, the labor market is still in a process of restructuring, and the welfare system remains too complicated and inflexible. So the government decided to try this thing with the guaranteed minimum income. It's supposed to help close the big income gaps among the population, and incentivize people to take a job - initially any job, even if it's not highly paid, or even a part-time job. Of course the best-case scenario would be if the recipients of this guaranteed base income launched their own businesses. So, until the end of next year, these 2000 unemployed Finnish citizens of age 25-58 will be receiving 560 euro a month, and anyone who wishes could apply for extra income without deductions.

In fact, the full guaranteed base income that would presumably replace all welfare aid, should be about 1,500 euro a month. While many are welcoming this as a very necessary breath of fresh air, others are not as enthusiastic, believing it's like alms, gifted money. But that's not entirely true, since all the money is being deducted from the welfare budget assigned for the unemployed. The money would really be like a donation in case you do find a job. Otherwise nothing is changed.

The Finnish welfare agency, called Kela, believes there's some good potential in the guaranteed base income. Because in their current form the social services in Finland are closely related with each other, this means if someone finds a job they'd be cutting expenses in other welfare services. So at some point the person asks themselves, why should I work more, it's not worth it. The new system seems fine, especially because Finland is still recovering from the crisis - if everyone had a stable permanent job, there would be no need of a guaranteed minimum income. But if many people remained without stable jobs and were forced to work several places to make ends meet, then this safety net becomes vital. In other words, the circumstances dictate the approach.

That does sound logical, at first at a first glance. Many believe such projects could be a viable solution and a way to ensure people's survival in difficult times. But no one knows yet how the Finnish experiment would eventually end, that's for sure. Many supporters of the project believe the state would be saving money that way, since many recipients would still be working extra jobs anyway, so the welfare budget wouldn't be too burdened. Others are concerned that too many people would just sit back, get the cash, and refuse to seek for a job. In that case the project could prove much more expensive to the state than the current welfare system. So it very much depends on the citizens' conscience. Given the Finns' general culture, we should be mostly optimistic in that respect - but that's just an assumption at this point.

There's one more question. Would extra work and having jobs with temporary work contracts, in addition to the guaranteed minimum income, become the norm, or would it just be an exception? If the project sees some vast abuse from recipients, such labor accomplishments as the protection from arbitrary firing would be rendered meaningless. And that would change the entire work culture in an otherwise quite industrious society in a very fundamental, and definitely unhealthy way.
Tags: north europe, welfare
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  • 4 comments
It's inevitable that governments will have to do this.
It is also inevitable that a large percentage of the population will sit on their butts and live on the handouts, rather than being gainfully employed in the make-work part of society. And to be candid, this is a price worth paying. The Romans worked that out many centuries ago.
Would they? How many people would prefer to live at the bare minimum while everyone around them is prospering? Especially in a culture like Finland, where diligence is the highest virtue?
560 euros is not nearly enough to survive in Finland in the long-term. These people would have to keep looking for jobs, it's just that they'd have some semblance of safety now.