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Finland Considers Minimum Income To Reform Welfare System
jones_supa writes: The Finnish government is considering a pilot project that would see the state pay people a basic income regardless of whether they are employed or not. The details of how much the basic income might be and who would be eligible for it are yet to be announced, but already there is widespread interest in how it might work. Prime Minister Juha Sipilä has praised the idea, and he sees it as a way to simplify the social security system. With unemployment being an increasing concern, four out of five Finns are now in favour of a basic income. Sipilä has expressed support for a limited, geographical experiment, just like Dutch city of Utrecht is executing this autumn.
Nope, it doesn't. Believe it or not some people are not 100% selfish.
Nope, it's conceptually different. Most ideas of "welfare" are based on "We'll help you, but only when you're worthy, and the goal is to kick you off it" which in turn leads to a whole system to enforce those rules. Which means a lot of it goes to paying people to run that system.
Basic income, however, is simply the idea of making sure people have the money to pay for the things they need to live, and avoids a lot of the expensive infrastructure and management.
It's not as bad an idea as it might seem at first sight, at least if it's implemented correctly. If everybody gets a certain basic income and can then work to add more money to that income, that guarantees a difference between working and non-working people and therefore provides an incentive to work. Right now, in many European countries, you may actually make less money by working than by sitting at home unemployed. Certainly if you factor in daycare, transportation expenses, etc.
By just giving everyone the basic salary, then letting them earn as much as they like above that (paying tax on those earnings to pay for the basic salary, obviously), you greatly simplify the system. No need to check whether someone is really unemployed or not before sending them their unemployment benefits, just send the same basic salary to everyone. Apply a flat tax to all extra income, and this automatically emulates the older system of progressively rising taxes. Also, it becomes cheap for companies to hire people for smaller tasks, since there needn't be a minimum salary anymore. If someone wants to do some job for $200 a month (on top of his basic salary), no problem.
Of course I'm oversimplifying and there will be a few caveats, but still, it's not as stupid or communistic as it seems.
does that say that 1/5 is paying for it?
I'm a taxpayer in the UK and a small business person. This means I see more tax than most people, because I see corporation tax, employer's contribution and what comes off my paycheck and goes to HMRC. Most people are on PAYE, get a monthly paycheque and never have to actually consider taxes in any meaningful way.
I'm fully aware of my tax burden because I have to administer it.
I support minimum income, for a variety of reasons.
1. You essentially need it anyway even if by another name because we've collectively decided that on the whole it's better than having homeless starving people.
2. You can scrap minimum wage. That's a whole load of administration gone.
3. You can scrap jobseekers allowace with all that administration and crap.
2 and 3 combine to remove the benefit trap. At the moment these things interact in bad ways. For instance taking a short term job on JSA is generally a bad move since when the job ends, there's a delay in getting new payments, so you essentially lose money.
4. It will help lower exploitation of poorly paid workers, because they can realistically choose to leave.
5. It will reduce the friction moving between jobs because the out of work periods aren't as punishing.
6. It will help startups through the early, poorly paid years.
Fundementally most people want to work and the minimum income won't provide a good standard of living. If you want to live well, you'll need a job. It might not work, but I think it's worth a shot and offers to save substantial amounts on administration while improving the felxibility of the economy.
Seems like a win to me.
SJW n. One who posts facts.
Because we don't need everybody working all the time in order to get our needs and wants met, perhaps? Maybe?
Who is "selfish"? Is the guy who wants to keep the wages he earned in his paycheck "selfish"? Is the guy who wants benefit money for doing nothing "selfish"?
Maybe labeling people "selfish" and then thoughtlessly dismissing their concerns isn't really a useful way to analyze policy preferences.
Guaranteed minimum income was tried as a multi-year experiment in Dauphin, Manitoba (Canada) in the 1970s. From the wikipedia page for "mincome":
"...only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay at home longer with their babies, and teenagers worked less because they weren't under as much pressure to support their families, which resulted in more teenagers graduating. In addition, those who continued to work were given more opportunities to choose what type of work they did. Forget found that in the period that Mincome was administered, hospital visits dropped 8.5 percent, with fewer incidents of work-related injuries, and fewer emergency room visits from car accidents and domestic abuse.[7] Additionally, the period saw a reduction in rates of psychiatric hospitalization, and in the number of mental illness-related consultations with health professionals.[8]"
The west has a very serious problem created by increased efficiency and automation: How to make sure enough wealth reaches all citizens to that they can live decently (ensuring freedom from social unrest) and spend locally (ensuring a working economy). The idea of a base-income for everybody is one possibility that has merit, in fact it seems to be the only one with a good chance of working. "Create more jobs" has basically been a failure, and nothing else suggests itself. The base-income for everybody may still be a failure, but it needs to be tried to see whether it works.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
It's a replacement for welfare, employment insurance, social assistance, old age security, etc.... Some fiscal conservatives are in favour of it because if nothing else it minimizes administrative overhead by combining everything into a single program.
Also, it's usually set up so that there is always a benefit to working more. Claw-backs start at 50% and go down as income goes up. (As opposed to silly current welfare that initially doesn't let people keep any of the incremental additional money they make, leading people to not even bother trying.)
That's a good snarky response, but I actually really hate when these discussions get boiled down to "selfishness". First, because it has a tendency to turn into the same old discussion where one side is moralizing and the other side is presenting some kind of counter-intuitive argument about how "selfishness" is actually a productive impulse. It's boring
But more than that, I think it throws the the discussion off track from the real reasons to do something like this. They are probably looking at a "minimum income" to replace other forms of welfare because they believe it's a better policy. It may be easier and cheaper to administer. It may be more economically efficient. There may be real, practical benefits to a policy like this.
To give a simple sort of example, I'm in favor of providing free vaccines to common illnesses to poor children, even if it means slightly higher taxes for me. There are selfless humanitarian reasons to support that kind of thing, but my motivations are not really all that selfless. I have three very selfish and practical reasons why I support it: (a) If I'm ever poor and have kids, I will want to get vaccines for them even if I can't afford it; (b) Paying for vaccines today is cheaper than paying for the illness tomorrow; and (c) Vaccinating everyone else in society cuts the chances of me or my loved ones becoming sick.
So going back to this plan, I'm in favor of whatever country I live in providing an effective social safety net for a few different reasons. First, I may find myself in a bad position sometime in the future, and I may need that safety net myself. I never have, and I hope I never will, but I possibly could. Beyond that, there are various reasons to think that having a good safety net can be good for society, as well as good for the economy. It removes some of the motivation for hopelessness and crime. If removes some of the hindrance on business to provide those needs for their workers. If it helps get workers back on their feet, enabling them to be productive, then that will help the economy.
I know there's a sort of "common wisdom" that says you need extreme, brutal poverty as a possible consequence in order to motivate people to work, but I just don't really believe that. I don't think that kind of suffering helps anyone. I don't think increasing income inequality and rampant poverty are good for the economy. I know a social safety net costs money, but I would support a good one, funded with my tax money, for some very selfish reasons.
Exactly this! I'm from Finland. The idea of basic income means different things for different people around here, but AFAICT the idea is not to give people more money. Instead the idea is to:
- give people the same amount of money they now get from unemployment benefits etc. but without asking any questions.
- tax the money back from people that make a living wage working.
This should have the benefits that:
- If you are unemployed, you can take even just one shift of work and get some money without losing too much of your benefits. This does not currently work too well, because you have to show that you are unemployed to get the benefits.
- If you get some benefits and do some work, you should always get more money by working more. In our current system, there are traps that may actually make you earn less by working more, because you lose more benefits.
- We should need a lot less people working for the public sector handing out benefits.
So the idea is to make working always desireable and lessen bureaucracy.
If you had a minimum level of income, sufficient for you to share a small apartment with a couple roomates and buy low budget groceries and bus fare and the like, but nothing else, would you just say "I've got it made!" and never work again?
Believe it or not, the vast majority of people want to take steps to better their lives. They don't want to just sit around on their arse all day. They want to own things, they want to be able to do things - that's human nature. And people take on work to be able to afford the things that they want. People also work to avoid boredom and to have achievements they can feel proud of. It's simply not true that you have to threaten people with starvation to keep them working.
One of the biggest discouragements to people working in most conventional welfare systems is that when they start working they lose their benefits. In some cases, they can even end up poorer by working; it's a counterincentive. Under a basic income scenario, this never happens - all work is extra money. And at the same time you ensure that nobody ever starves in the streets. Having such a safety net also ensures that people feel more free to work toward their passions and take big steps that they might otherwise have been too afraid to take for fear of ending up in the streets. And society ends up a better place, even more productive, when people are working in fields that they enjoy. It's a huge benefit to general happiness - which of course should be the goal.
There's other benefits as well. Namely, it simplifies everything. Think of how many various social services are run for different people who have been disadvantaged by different situations. And all of the paperwork and review to see if people quality, and the effort to administer the programs, and ensure compliance, and this, and that. A large chunk of the existing welfare infrastructure can simply disappear if everyone has a minimum level of guaranteed income - X amount for each adult plus Y for each dependent child.
There's a lot of good reasons for such a program.
"99 dead duelists of Dios on the wall. 99 dead duelists of Dios! Take one's ring, pass it around..."
As a retired person, I get both a small pension from my work, and Social Security. From my small income I purchase health insurance to supplement my Medicare. I have no savings (wiped out by "problems"). It's enough to live on. As a result, I already live as people in Finland/Utrecht do. I know a ton of retired folks in the same boat. Here is what I observe. Retired folks are as energetic as their health allows. There is an awesome amount of volunteering going on, and a bit of "small business" activities. I myself am a retired computer guy, and as such, get asked to fix a lot of computers. I ask for a "donation" of about $20 an hour for fixes that would cost them $90/$120 at any computer shop. Sometimes I fix things for free. I rationalize that I am helping poor old folks :), and also getting some money for an evening out for my spouse and I. I also maintain an number of community, club and museum websites as an unpaid volunteer. So I am in the category of "not needing a minimum wage". What I really see is this. People are as active as their health allows. There are a lot of social activities and game playing, such as dancing, musical jam sessions, theater presentations, variety shows, golf, pickle ball (like tennis), cards, bingo and water volleyball. Many of these activities require administration, and they are staffed with happy volunteers, who give an amazing amount of time. People into hobbies, such as my spouse who quilts, will work at them from dawn to dusk. People value life, their families, their communities and their world, and they do what they need to take care of their health. What I don't see is violence, drug use, laziness, or homelessness. I will concede that communities (I participate in several) of retired folks represent the result of a lifetime of a good work ethic. But what I don't see are bad results worried about by many. I read Marshall Brain's prescient "Robotic Nation" years ago, and the handwriting is on the wall folks, and I'm glad to see some early-adopter nations experimenting with our future.
Nobody knows what all the costs are in doing this.
In theory, it could be cheaper than the current welfare system, because administrative overheads are lower, and incentives are better. Since everybody gets it, there is no eligibility test, and no application forms. You get the same amount whether you work or not, so there is less disincentive for employment. But there could be unintended consequences. Taxes may go up, giving companies an incentive to locate elsewhere, and the wealthy an incentive to emigrate. If the benefits are generous, they may pull in non-working immigrants from the rest of the EU.
Surely if the job is not wanted but necessary, it is worth paying more for it. Supply and demand.
You don't get to force demand by threatening someone with starvation or incarceration for not doing that job.
Someone has to clean the toilets. Your CEO may think it a lowly job, but how much would you have to pay THEM to do it? Vastly more than they are paid for their current job. Surely therefore the job should not be minimum wage. It's worth more than that.
I'm in the United States, for reference.
I'm assuming you've never been on the bottom economically.
I volunteered at a food bank for a few years.
The clients mostly consisted of:
1. Veterans on the streets because of mental problems.
2. Mothers/Grandmother's looking after their children's kids (many of the "children" and spouses were in prison for various crimes)
3. Drug/alcohol addicts with no options for treatment (because of no $)
4. People working minimum wage but not making enough to live
5. People with physical disabilities including disfigurement (someone with heavy facial burn scaring isn't likely to get a retail position).
Many of them wanted to and were capable of work and were very happy to take very occasional menial work at the church's events (dish washing for example). They just didn't have opportunities available. The average high school student would get the job before them.
Anyway, to me, there is an entire class of people that we shouldn't kick. I feel that welfare should provide these people with, at a minimum, the same level of services provided to our prisoners. People that have harmed society are treated better than those who are just unfortunate in the US.
For these people, time isn't money: Time is Food.
BlameBillCosby.com
We need to start looking at welfare in a different way. We will soon enter an age when we don't need "full employment" for everyone to have all the goods and services that they need. The late-stage capitalism where the more things are automated, the harder working people have to work, is just not sustainable. The only reason we have that situation today is to support the supply-side perversion of capitalism. It's already groaning under the weight of supply-side economics, and the burgeoning disparity of incomes and wealth is the evidence. When you have more than 40% of the US work-force making less than $15/hr, and 80% of people not having enough savings to retire on by age 68, social and economic disruption is going to occur.
Rich people can hire only so many servants and drivers and people to wash their cars and be nanny to their kids. There are only so many people needed to service the robots. Only so many people needed to do the dirty work. And those are just the low-paying jobs. The middle-income jobs have already started to go. How valuable you think your ability to program Java is going to be by 2017? Or for that matter, by this Christmas?
So, we can decide that a guaranteed minimum income is something we need, or we can decide to become a society where 67 year-old beggers fight with 25 year-old beggers who fight with 12 year-old beggers as they line the streets. As someone who's spent time in such countries, let me tell you, it's not that great to be a well-off person in a place where everyone else is dirt poor. It might appeal to the big-L Libertarians in the crowd, but for the other 99%, it's not a pleasant proposition.
You are welcome on my lawn.
Companies could relocate out, but entrepreneurs would abound!
Think about how amazing it would be if you could tell "the man" to go to hell, and go out and start your own company with your own ideas and initiative. Knowing that in the years it's going to take to build a market segment large enough to become significantly profitable that you, your spouse, and your children will all have their education covered, their medical expenses covered, and enough money to cover your mortgage and food.
I would have gone independent long ago if I had such a solid safety net.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
I think that's pretty much the case.
That and they want to hold the threat of starvation over their heads to force them to do shitty jobs, that otherwise they would have to be paid more to do.
It's sad, and kind of sick when you watch the thought process play out in people who oppose this for those reasons (as opposed to other, non-sadistic reasons like cost).
"But, if you don't force people to work, they won't clean toilets!"
Not for $8/hour, no they won't.
"So society collapses!"
No, you just have to pay more than $8/hour for toilet cleaning work.
"But I make $15/hour in my respectable job. If you pay a toilet cleaner $20/hour they'll make more than me!"
Yes, because your respectable job is, what, a telemarketer? Yes, the guy cleaning toilets has a more important job than you, and should be paid more for doing it. I need clean toilets more than I need a call during dinner time trying to sell me a subscription to Ass-Wrangers Quarterly.
"But, but then...I'll be the one making the least amount of money!"
Yes, you will basically have the "minimum wage job." You want that $20/hour money? Go clean toilets.
"But that's demeaning!"
You were fine with it when somebody else was doing it. And with paying them so little they were only doing it because they'd starve otherwise. You were treating them unfairly, and you liked it. Sick.
We don't have a state-run media we have a media-run state.