Finland Will Give Some Unemployed Citizens a Basic Income (theoutline.com)

Next month, the Finnish government is going to try something completely different to help its unemployed citizens: give them free money. From a report on The Outline: On Jan. 9, 2017, a randomly selected group of 2,000 unemployed citizens in Finland will receive a check for 560 euros (about $585) with no strings attached. They'll continue to receive that check every month for two years straight, even if they find a job or continue to remain unemployed. This is part of an experiment to see what happens to people's participation in the labor market after they've been guaranteed a certain amount of money.

Comments

I predict a lot of misunderstandings about BI

[serviscope_minor]

I suspect this thread like the last will have a lot of misunderstandings about BI.

The biggest misunderstanding for the general principle is that you take the existing system as-is and simply give everyone 10k per year or something. The numbers are clearly absurd so that causes people to dismiss it.

That's not how it works.

Basically what you do is modify (increase) the tax so in most cases, people get net more or less what they do now. That way the numbers come out more or less the same as they are now but in practice on the low end people do get extra money. Most people won't see much of a change.

Re:I predict a lot of misunderstandings about BI

[MrMr]

As Finland already has an indefinite 'labour market subsidy' system it seems not much more expensive than their current system. The difference is just that benefits are not reduced for two years if the long-term unemployed happen to get a job during the trial. If the job-market is poor enough it won't cost anything extra...

Re:I predict a lot of misunderstandings about BI

[bluefoxlucid]

I encourage you to take a look at the spreadsheet labeled "WageTax", and the one labeled "EmploymentCost".

Single individual making $150,000 takes home $3,932 more per year; employer cost is roughly $9,300/year cheaper (assuming a low 18%-of-salary cost of employment, although it's usually 25%-40%). Buying power difference is estimated here as a 9% increase, although that's again a conservative estimate.

Single individual making $60,000 (about median) takes home $6,289 more per year; employer pays roughly $3,720 less. Buying power difference is about a 19% increase.

For married households, it's bigger, although the costs to the employer don't change (they drop by the same amount).

Taxes don't need to be raised on the highest income earners; they can be lowered on businesses, notably on payroll (tax taken based on how much wages you pay).

Re:I predict a lot of misunderstandings about BI

[ShanghaiBill]

Basically what you do is modify (increase) the tax so in most cases, people get net more or less what they do now.

The problem is that the people that would get less (rich people, hard-working people, old people, disabled people) would fight this, and would likely be much better organized than people that would get more (poor people, lazy people, young people). At least in America, I don't see this happening.

Re:I predict a lot of misunderstandings about BI

[Wycliffe]

Basically what you do is modify (increase) the tax so in most cases, people get net more or less what they do now. That way the numbers come out more or less the same as they are now but in practice on the low end people do get extra money. Most people won't see much of a change.

The problem with this approach is now 10k dollars per person now passes thru a middle man before coming back to you. There is a huge incentive for the middle man (or men) to steal, borrow, modify, add strings, etc... as it passes by. That's over 3 trillion dollars for the USA and now literally everyone is dependent on the government because for most people over 25% of their income now comes from the government.

Re:I predict a lot of misunderstandings about BI

[Tx]

Considerable irony here, seeing as you're guilty of misunderstanding BI yourself. There are many different BI schemes proposed, of which what you describe is just one, so saying "that's not how it works" is clearly not very meaningful. The most practical BI schemes are the ones that are fiscally neutral, whereby existing welfare schemes are scrapped, and the budget used to fund a basic income instead. The Finland scheme is of that sort. It's not about modifying or increasing taxes to pay for it; the big change is the scrapping of the existing complex, bureaucratic, and expensive welfare systems in favour of a basic income payment. Tax is supposed to remain pretty much unchanged.

Re:I predict a lot of misunderstandings about BI

[serviscope_minor]

So you pull money out of the economy, and give a portion of it back to other people. It's a net loss.

If you do it right you pull no more money out and pay no more money. So it's no net difference.

Re:I predict a lot of misunderstandings about BI

[Anonymous Coward]

I just want it. Stop dangling the carrot. Its a no brainer, give me $1000 a month or what it ever is, you can be almost certain that $1000 will flow directly back into the economy one way or another. The middle/working class its not like the 1%ers - we're not going to sit on all this money and remove it from the economy.

Re:I predict a lot of misunderstandings about BI

[MightyMartian]

A singular advantage in a BI scheme is that it can shrink down a government's welfare fraud investigation system, as many of the forms of fraud seen in most unemployment/welfare benefits systems all but disappear. Depending on how BI is implemented, there might still be some gaming of the system for child and/or marital benefits, but this is more an argument for a flat BI system. But, as you say, there are multiple BI schemes out there, and each one has to be analyzed to determine overall costs both in the form of expenditures and in governance costs.

Re:I predict a lot of misunderstandings about BI

[MightyMartian]

Rome used to give bread to the mob, because when they didn't, food riots would break out and then you'd see some real violence.

As it is, automation is going to mean a lot of jobs, even low skilled service jobs will disappear over the next half century. So you can buy into your Libertarian-fueled dystopia all you want, but back in the real world, where governments have to deal with real problems, UBI is going to happen, and you can't take your whole "the violence inherent in the system" crap and annoy your relatives with it.

Re: I predict a lot of misunderstandings about BI

[serviscope_minor]

Administration costs that wouldn't exist if you weren't doing it in the first place.

The existing system already has administrative costs. In fact one of the supposed benefits of BI is you vastly shrink the admin since you don't to deal with vetting and enforcement of myriad different schemes.

Not to mention the opportunity costs incurred by the people who provided the money

I really don't understand how you're failing to get the point. Those people are ALREADY providing the money. It's not like you don't currently pay taxes (unless you're the president elect). The point is the total tax income doesn't change. You just distribute it differently.

Re:I predict a lot of misunderstandings about BI

[serviscope_minor]

Considerable irony here, seeing as you're guilty of misunderstanding BI yourself.

I like how you say that then narrow it down to the only practical one which happens to be the one Finland is trying and the one I'm talking about. I'm not sure there's really any point in discussing the impractical ones which no government ever is considering and only serve as a straw man in internet discussions.

Re:I predict a lot of misunderstandings about BI

[khallow]

GDP is roughly money supply * velocity of money

No, that's a standard approximation for inflation given a fixed demand for money. Inflation != GDP.

Second, what is the value of increasing GDP? It's just another example of a broken window-type fallacy where increasing GDP is considered a higher priority than what is actually done with the increased economic activity.

Re:I predict a lot of misunderstandings about BI

[ShooterNeo]

I understand your frustration and fears somewhat, but keep in mind that :

1. Today, the government controls 100% of your income for nearly all workers because they have the power to freeze your accounts and assess whatever taxes they want on your income. We already do live in a complex mess of stealing (they can seize your money even if you are never convicted of a crime), borrowing (look at the Federal debt), modifying (tax credits change every year), and there are many many strings to get some of your money back with tax credits (get married, have a kid, install solar panels - the list goes on for literally thousands of pages)

2. Most workers are at the mercy of a private employer who may fire them at any time for basically any reason. Yeah, there are supposed to be "protected classes" but all that means is the employer has to cover their ass with paper by writing you up for every negligible infraction, while letting the employees that they want to keep get away with those same infractions. Once fired, that is 100% of your income, and you may be able to get another job next week, or it might take 2 years...

3. Right now, if #2 happens, you basically become homeless and basically starve. Most states there is only minimal help in the form of food stamps, food banks, and homeless shelters. Oh, and if you get sick, if the illness is treatable and will kill you in about a day, yeah you can get free medical care at an emergency room. Get treatable cancer, and you can't afford health insurance? Well fuck you, you're gonna die.

Re:I predict a lot of misunderstandings about BI

[Anonymous Coward]

Im waiting on the automation that will fix my sink, toilet, and bathtub. Or the automation that will wire a house for electricity, maybe automation to build walls and frame a new house. When will we get the automation to fix the potholes in the road or to repair the street lights then they stop working?

Sure, Mcdonald's may go over to kiosks but there are literally millions of jobs out there. Many requiring little or no training and many that will trin you.

Re: I predict a lot of misunderstandings about BI

[king neckbeard]

Think of it as immunization against hoarding instincts by the mega-rich. They are acting irrationally, hiding so much money that their great-grandchildren probably couldn't even sanely spend it all, in tax havens and such. That hoarding behavior destroys the velocity of money, which stifles the economy as well as causing poverty and crime. Also, as stated by others, UBI is actually really simple in administration.

Re: I predict a lot of misunderstandings about BI

[Bartles]

Hiding it where? In a giant vault where they swim Scrooge McDuck style?

Re:I predict a lot of misunderstandings about BI

[MightyYar]

For what it's worth (not much), though a lot (most?) Libertarians go for the strong property rights thing - even to the point of Ayn Rand Objectivist stuff in extreme cases - it is not necessary for one to embrace strong property protections and still be a Libertarian. Life, liberty, and the pursuit of happiness is a nice loose phrase with lots of interpretation wiggle room in the last two parts. Especially the last.

I'd love to see UBI experimented with on a large scale. Take a random swath of the US and change their tax and entitlement benefits. No Medicare/Medicaid, no Social Security, no unemployment, no food stamps - just a fixed weekly direct deposit. Tax rates adjusted such that the average participant will net about the same amount of money as before. But that's not how it will happen, because it will become a political issue and we'll swing back and forth until something shakes loose.

Re:I predict a lot of misunderstandings about BI

[skids]

maybe automation to build walls and frame a new house.

That one is actually in the pipeline; there are several companies working on 3D printing buildings.

Also the pothole thing is well on the way.

Plumbing and mods to existing structures are probably going to be some of the last jobs to "go". I say "go" because certain jobs will always need a human to supervise the bot and/or tuck corners.

One thing that baffles me is why we don't have a wall-crawling wallpaper inkjet already. Especially with wallpaper coming "back in fashion" now that people finally figured out that tearing down the wallpaper and just painting everything the color of puke makes your house look like a public school.

Re: I predict a lot of misunderstandings about BI

[Anonymous Coward]

swiss bank account. cayman islands bank account. bahamas bank account. etc etc.

it's almost like you didn't even try to think of an appropriate answer before spouting off flippant nonsense.

Re:I predict a lot of misunderstandings about BI

[networkBoy]

The roads being fixed is absolutely automatable, as is long haul shipping.
Changing streetlights doesn't need to be automated to see a severe workforce reduction, my local muni is replacing nearly all the Sodium Vapor lights with LED. Those won't burn out nearly as often, so you need less people.
In many cases houses are already coming partially framed in advance, roof trusses being the most obvious, but I've also seen entire walls arriving already framed, doors, windows, and all. Just stand them up and nail them down.

Not all of this is labor elimination, but a *lot* of it is labor reduction.

Right now I'm betting (in the case of the framing) that it is more a shifting of labor location rather than full elimination, but there is no big stretch to automating fabrication with wood.

Re:I predict a lot of misunderstandings about BI

[T.E.D.]

Rome used to give bread to the mob, because when they didn't, food riots would break out and then you'd see some real violence.

That's largely true. However, the riots were more of any annoyance than anything.

The real driving force in Imperial Rome was the armies. Whenever an Emperor died (or an existing one sucked), generally the armies between themselves (often times by fighting each other) picked who would be the new Emperor. That effectively meant the army had to be kept happy at all costs, which in practice meant they kept getting raises, regardless of the rest of the Empire's ability to pay them. Eventually they had to start looting their own temples to pay the Armys' wages.

Re:I predict a lot of misunderstandings about BI

[Hognoxious]

It is why nobody rich hordes money.

No, the real reason is that it's quite hard to get money to go marauding across Asia on horseback.

Re:I predict a lot of misunderstandings about BI

[jezwel]

This is what rich people already do - companies and trusts that pay their way, their take home pay can be inconsequential.

Re:Not unconditional

[olsmeister]

They'll continue to receive that check every month for two years straight, even if they find a job or continue to remain unemployed.

Incomplete economic experiment

[bluefoxlucid]

I've generally talked about a Universal Social Security (a type of UBI) in its potential to create broad market effects. That's not possible in these small experiments, so you get incomplete information.

Imagine being a landlord. If an average of 10% of your theoretical rent revenue is lost to evictions and empty units, what happens? You have 10 units that must rent for $250/month to make your profit margin, yet you face a risk of $25/month per unit. Well, to retain the same profit margin, you have to charge $275/month--and what if your tenants can only afford $260/month? You can't rent these units. Mind, your tenants will more likely only be able to stably afford $260/month, meaning they have $275/month but have a good chance of sometimes having only $260, and so that $25/month needs to be higher to cover that risk, and now you've got to charge them $285/month, and it's even worse now.

You can't profit in that market.

Now imagine we change things around. Instead of your tenants being underemployed, part-time workers who can lose hours, jobs, or welfare (unemployment insurance) with the season or just bad luck, they have a guaranteed income. Your tenants will have enough money for food, clothing, personal care, utilities, and a steady $260/month. You have 10 units with a base rent of $250/month to hit your viable profit margin, and now they're only facing a 4% risk. You can charge your tenants $260/month to cover this, and they're stable at that rent: you'll lose money to evictions and empty units at an amortized cost of $10/month, on average, thus still hitting your profit margin.

Do you think landlords will gradually test the waters, then start building out rental properties and attracting low-income tenants, when that stable income is going away in 2 years, or 5 years, or 10 years? It's going to take a while to get ROI.

Financial stabilization brings economic stabilization. When people can't go below a livable income, ever, for any reason, then the supply of a basic service can't be interrupted by a sudden collapse of the demand market. That's central for a market-driven welfare system like any form of basic income.

Re: Incomplete economic experiment

[Anonymous Coward]

No, the few property management companies will collude to raise the rent to eat all the guaranteed income. The same thing happens when you raise the minimum wage: rental prices go up.

Re:Incomplete economic experiment

[DigiShaman]

Supply / Demand. Depends on the market. If you're renting out units a near 100% capacity, the price will go up proportionally to the BI being able to sustain it. That's the whole point of a MARKET, to find that optimum equilibrium of market value. This is no different than what's happening now with the student loan bubble. Might as well have had the government written a check directly to the universities; in essences, that's what happened with the student holding all the risk.

BI by any other definition is blatant inflation!

Re:Incomplete economic experiment

[ShanghaiBill]

In America we have something like what you describe: Section 8 Housing Vouchers. Taxpayers pick up about half the cost of rent. I own a rental property in San Jose, and I definitely prefer Sec 8 tenants, and (like you describe) I give them a bit of a discount because of the reduced risk of evictions and vacancies.

This program is good for both tenants and landlords, but from a public policy perspective, I think the program is idiotic. Using tax dollars to help poor people live in the heart of Silicon Valley makes about as much sense as car vouchers to help them buy a Lamborghini. But anyway, I enjoy getting the subsidy check directly deposited to my bank account every month. Thank you taxpayers!

Re:Incomplete economic experiment

[110010001000]

No landlord likes Section 8 tenants. You don't know what you are talking about. Section 8 tenants are the worst.

Re: Incomplete economic experiment

[Kabukiwookie]

You're correct in your assumption, but fail to take something into account.

Increase in rent may, at least in part, be off-set by the fact that people with a guaranteed income will move to areas of a country that at the moment have very little economical activity (hence low rents).

This means less demand for rental accommodation in big cities, which in turn puts pressure on the amount of rent that can be charged.

As a side-effect, due to people moving to areas that are currently not economically active, economic activity in those areas will increase.

Now whether economic activity moving out of the crowded areas, where everybody is vying for the same limited amount of resources, and spreading out more evenly counter-balances some private actors to eat up people's UBI completely, is not guaranteed.

It will take time to see if this is actually effective and in short term land-lords will probably indeed put up their rents. Until the time people get fed up enough to move out of the cities.

Re: Incomplete economic experiment

[ranton]

As soon as you give people more money, the upper classes will obtain it eventually.

Yes they will, right after the poor have been fed, housed, and given a reasonably comfortable life with that money. Sounds like this kind of wealth redistribution is a win win the way you describe it.

Re:Incomplete economic experiment

[Kiuas]

BI by any other definition is blatant inflation!

No, no it isn't. The whole point of BI is to simplify the already existing models of social security. The people in this experiment are currently on unemployment benefit which this will replace. The whole point about BI as others have pointed out is that it's created essentially as a negative income-tax bracket. That is, not everyone across the board will get X amount of euros more (which would be what you describe: a blatant increase in inflation and nothing more). The BI will be taxed away from people making above a a certain amount, thus making it a modified version of the already existing benefits we have here.

Have a look at this chart, it's one of the proposed models for basic income by the Finnish Green Party. Now, I might not entirely agree with the numbers therein but this gives you an idea of how these systems are imagined. The leftmost column is the basic income, same for all income groups. The column after that is income from work, and the column after that is taxes paid for on the income for work (41 % for those making less than 4200, and 49 % for those making above it). The column after that is net income after taxes, and the column after that is total income (net income + basic income), the rightmost column is the effective tax-rate. Now you can see that for the two lowest classes, even though the nominal taxrate is high (41) the effective tax-rate is indeed negative due to the basic income, and only 4 % on those who make 1500.

This model (and most UBI models floated around here) would actually lower taxes on middle and low income earners. The cost to moving to a model like this from the current system would actually be relatively small, as we already have a both heavily progressive taxation system as well as a wide-variety of different types of social benefits that this would replace,

The whole problem with the old-fashioned social-security systems currently in use here (in Finland) and elsewhere is that the amount of terms and conditions involved with them create a trap: people cannot for example accept part-time or gig jobs as that basically stops the for receiving the unemployment benefits for awhile and they have to re-apply for it, effectively meaning that taking say a 3-4 days job offer will often lose you more money when you factor in the loss of the unemployment benefit for a fixed amount after that.

This makes no sense, as it's trapping unemployed people into a situation where they're afraid to take part-time jobs because they cannot for certain know they'll be able to survive the interrim period between the part time job ending, and the umemployment benefit starting to run again.

This is one of the scenarios in which BI is meant to help and is actually what this experiment is meant to test: what they're looking at is whether or not allowing people the same amount of income as they're currently getting in the form of the current unemployment benefit but guaranteeing that they will not lose it if they take a part-time job offer, whether or not this increases the people's willingness to take up short/part-time contracts, knowing that their income will be secured and will not be disrupted by this.

Since the amount in this experiment is no different from the existing unemployment benefits, it cannot be argued that this will drive inflation up, as we've had hundreds of thousands of people receiving the exact same amount of money in the form of unemployment benefits for years, and that has not driven up inflation.

With automation taking more and more jobs systems like UBI are a necessity for the future: if we want to keep the economies running, if we want to maintain a consumer-base of people who have money to spend on goods and services in a future in which their labor will be either of very little or no value (because they've been made obsolete by machines), we must provi

Re:Incomplete economic experiment

[ThosLives]

I feel like you're not following ceteris paribus here.

The hypothetical landlord already owns and maintains that property in the current environment - so is making enough profit or whatever to continue being a landlord.

What you're arguing seems to be that in an unstable economy, if a landlord currently rents out property at $250 a month, and a shock suddenly occurs, then he will go bankrupt because tenants can't pay that. But UBI stabilizes that, so an economic shock doesn't remove the tenants' ability to pay rent.

I would say that in general that is true, but that doesn't have anything to do with price levels - why would a landlord reduce prices if he can get a higher guaranteed utilization at the same price unless he is competing with other landlords? Also consider that $300 a month at the same 90% utilization (supported by the more stable UBI) is more revenue than $250 a month at 100% utilization - the landlord most certainly would try to maximize profit and raise rents.

Re:We have the same thing in the US

[ShanghaiBill]

We have the same thing in the US - we call it the lottery. Winning still doesn't seem to correct bad choices.

You can only win the lottery if you buy a ticket. Buying lottery tickets is pretty stupid. So people that win lotteries tend to be stupid people that make poor choices. You would see much better outcomes if the lotteries winnings were assigned randomly.

Disclaimer: I only buy lottery tickets as part of the "office pool", which I view as a social activity, not an investment.

Re:We have the same thing in the US

[Clsid]

So you engage in something you consider stupid, and that makes you stupid by your own definition because of peer pressure. Lol. I'm laughing mostly because you dismiss a lot of people as stupid just because they do not see it the same way you do.

Even if statistically speaking it is almost impossible to win, if buying a cheap ticket, gives a small thrill to somebody that makes them happy, you should not qualify people as stupid like that.

By that measure, everybody going to Vegas is stupid, and I'll be damned if you don't happen to have a good time once you go there.

Long live Greed in the Welfare State.

[geekmux]

If you're looking for the point behind this little "experiment", they'll increase this by 17 cents a week in order to define an acceptable floor for UBI, otherwise known as the bare minimum it takes to satiate the average pleb.

As I've always said, UBI will be nothing more than Welfare 2.0, and not a damn penny more. The greedy elite will lobby to guarantee it.

Death to the Dream. Long live Greed, for it will always Leech and Prosper.

Random?

[Major Blud]

"randomly selected group of 2,000 unemployed citizens"

I'm assuming that Finland already has some type of unemployment assistance?
(their current unemployment rate is hovering above 8.5%; https://ycharts.com/indicators...)

Does this reflect people that only apply for unemployment assistance? Their labor force participation rate is 64%;
(http://www.tradingeconomics.com/finland/labor-force-participation-rate)

What I'm wondering is if any of those 2,000 "random" people will be folks who are retired and wouldn't have any other source of income anyways.

Re:Finland

[MightyMartian]

UBI is not about replacing work, it's about a universal backstop so that if you cannot find work, or sufficient work for the basic necessities, you will be assured enough to pay for the roof, heat and food. Presumably, in a UBI world, high income earners would essentially give all the UBI back in the form of taxes.

Sooner or later UBI will have to happen. Automation is going to remake the working world as profoundly as the Industrial Revolution did.

Re:Finland

[__aaclcg7560]

Presumably, in a UBI world, high income earners would essentially give all the UBI back in the form of taxes.

George W. signed a $3,000 tax credit for adults to learn new job skills into law after 9/11. I used that tax credit to go back to school to learn computer programming and switched from video game testing to IT. Today I pay more in taxes than I did 15 years ago.

Re: Not unconditional

[tripleevenfall]

And finally the social "safety net" becomes a hammock

GOP Philosophy [Re: We shouldn't have to work]

[Tablizer]

[GOP] are evil.

I wouldn't go that far. Their reasoning is arguably legitimate, BUT they don't directly admit to the unpleasant or complex consequences of their system.

It's essentially a modified Social Darwinism (SD) argument: to keep our citizens competitive we have to cull the herd by letting the sick and lazy wither or die, with some caveats given later.

Some citizens have to be the sacrificial lambs to keep US citizens strong and competitive.

It's a legitimate perspective, but they don't WANT to fully tell you the plan because it's embarrassing to admit to; similar to how many didn't tell pollsters that they were voting for T: he's says nutty and shameful things.

I should point out that some will claim, and perhaps even believe, that if you lower taxes and reduce regulations enough, the economy will be unleashed and "float all boats" such that there is minimal human suffering by even the laziest or sickest. Therefore, if you "do conservatism right", the down-sides of SD are minimal, and therefore GOP are not really the iron-hearted human breeders that pure SD requires.

The problem is that trickle-down has been failing in practice for several decades. It doesn't work, but they won't admit it, saying you merely "are not trying hard enough" (like you hear with many IT and project management fads).

Also, they believe churches can and will help out for the sick and afflicted. While true in many cases, it fails during deep recessions, which overwhelm churches due to both the volume and reduced donations.

And it could result in atheists, Muslims, etc. being discriminated against for having the "wrong" beliefs. The biggest churches will have the most control and influence over care. Progressives view such as an evangelical "sales" gimmick: we'll feed you if you listen to our religious spam. If you as an evangelical believe your religion is the right religion, you are okay with this lopsided influence because God is on your side and wants the system to promote The Correct religious system.

Thus, conservatives and libertarians have a valid perspective, given certain assumptions, but are usually not straight-forward about the assumptions and trade-offs of their reasoning system. Most know it's an ugly sell, not foo far off from Nazism, and try to dress it up with fluff and distraction.

Re:Sometimes it's better to say on vs taking any j

[wonkey_monkey]

I'm guessing you spent your UBI money on booze today.

a job guarantee would be a better solution

[Presto Vivace]

https://www.thenation.com/arti...

Re:a job guarantee would be a better solution

[king neckbeard]

It's less overhead to just give people money than to make them do busy work, and at some point, a guaranteed job is going to just be busywork.

Re:Finland

[Anonymous Coward]

People dont just want handouts. They want to be able to prosper and live with dignity, do meaningful work, and contribute to their country.

I assure you there's a LOT of people who do want handouts and are quite happy to sit on the sofa all day drinking beer.

I say let them then.

There are people who complain about food assistance folks spending their money on lobster or cake or something along those lines. I say go for it... if that's what they feel they need to do, then who am I to say that they don't need that?

Another example is the person who might buy a piece of jewelry that they really want despite the fact that they have other obligations. That person may feel that they need that.

Do you want to take responsibility for their finances? No? Then shut up about it and mind your own business.

Price Fixing

[inhuman_4]

I for one am glad Finland is doing this. It will save my country from being this generation's lab rat. It seem very couple of decades we need to relearn that price fixing doesn't work. I would have hoped the Venezuelans spectacular meltdown would have been enough, but it guess not.

Economics is all about whats happening at the margins. The marginal utility of going from $0->$5 per day in income is much greater than from from $200->$205. By giving everyone (this study is only starting with a few) a guaranteed fixed income you've just hugely reduced the utility of a working a low paying job. If you're getting nothing a job that pays $30,000 is a huge improvement because you have lots of time and no money. If you're getting $20,000 UBI you have lots of time and some money, the value of going from $20,000 to $50,000 won't be worth it to some people. In order for the low paying job to have that same marginal utility it's going to need to pay a lot more. Which raises the price of everything, which means that $20,000 doesn't go as far. Yay inflation! The market will readjust, and keep readjusting, until you relearn that price fixing doesn't work.

Re:Price Fixing

[Anonymous Coward]

Actually it will increase the utility of getting a job.

If Finland is anything like the Netherlands, then you would find that minimum income is hardly more the wellfare, working 40 hours week for a few percent increase is not very appealing.

Having a job and keeping your basic income would mean you see an immediate benefit.

When minimum income is going to be lowered to offset basic income, it is a better psychological incentive to see 'added' money.

Re:Price Fixing

[T.E.D.]

I for one am glad Finland is doing this. It will save my country from being this generation's lab rat. It seem very couple of decades we need to relearn that price fixing doesn't work.

I don't agree with your (dogmatic?) presupposition that the experiment won't work, but otherwise I agree 100%. In the US we often use state law to carry out such experiments, but due to lack of internal immigration barriers I don't think BI could be done as an effective experiment by a single US state. Some country somewhere really needs to try this out on a large scale so we can find what the real problems and benefits of it are. Not having a more than a theoretical clue about that ahead of time, it would be insane to try it out on the world's largest economy.

Re:The American version...

[khallow]

Cronyism:

the appointment of friends and associates to positions of authority, without proper regard to their qualifications.

Other then committing perjury for two years without ever being caught, there was some questionable circumstances about how he got his contractor license.

The former is run of the mill corruption, it's not cronyism. And the latter doesn't sound like it either, even assuming the contractor's license covered a legitimate societal need rather than just being another government feed tube.

Ironically, he did that because he couldn't find a doctor to certify that he was disabled in the knees after being an auto body specialist for 30 years.

Still not cronyism.

Re:Finland

[slew]

And unlike when they were receiving unemployment payments, these people can now go out and get at least some form of a job without losing those payments.

At least in the US, it is not totally uncommon that some folks receiving unemployment payments to work cash-jobs on the side and continue to collect unemployment checks. When they finally find a real gig, it pays them more than unemployment checks.

The real issues in the US are for those on long-term unemployment who transition to be dependent on welfare programs.

1. They would often lose medicare, childcare, food assistance and other benefits as they become partially employed, and
2. They eventually become unemployable as their job skills bitrot over time.

Right now these welfare benefits are worth way more than their "cash-equivalent" in the free market, so the reduction of those benefits are not reasonably offset by just giving people some equivalent amount of money if they transition to "some job". For example, the pay of a minimum wage jobs might not realistically offset the cost in child care benefits lost, so although you might get child-care paid for whilst you are *training* for a new job, you might not really afford to simply get just "some form of job" after your training because it won't cover the child-care benefit you would lose. The situation sorta sucks right now for the long-term unemployed.

Re:Finland

[Anonymous Coward]

But the employer, church, coven, etc that chooses to do this is doing it with money that was voluntarily given to them. When government does it they're using money that was taken by law. That's the key difference.

Re:Finland

[ShanghaiBill]

However, the government doing these things is looked down upon.

Here is a clue: The government is spending someone else's money.

If you have an apple tree in your yard, and you pick the fruit and give it to the poor, people will think you are generous.

If your neighbor has an apple tree, and you pick the fruit and give it to the poor, few people will think you are generous.

Re:Finland

[ShanghaiBill]

With jobs becoming more scarce

Jobs are not becoming more scarce. The American economy is generating about 180,000 additional new jobs per month, which is significantly greater than population growth.

Given the dole or turning every city into mini-Aleppos...

Perhaps those are not the only two alternatives. The violence in Aleppo was not caused by unemployment.

Re:Finland

[skids]

Really it's a shame, with or without a UBI, that legislators have not managed to take these perverse incentives out of the system. Basically benefits should fade off rather than just disappear at some threshold... the overriding rule should be "if you work, you do better." So far in the U.S. we have Republicans who hate giving anyone money for anything that doesn't involve either kickbacks or indoctrination, and Democrats who are too afraid to open the book on this business without an airtight super majority (excluding potentially backstabbing blue dogs) which they never seem to get.

Well, now that the R's have the majority, probably the entire social safety net will get gutted, so at least when the pendulum swings back, D's will have some brownfield to build on.

Re:The American version...

[Areyoukiddingme]

He used his unemployment benefits to start a landscaping design business. Now he's self-employed fulltime. Crony capitalism at work.

This is the second time in a month I've seen this attempt to redefine crony capitalism to mean "any contact with government money". That's not what it means. Somebody, somewhere is subjecting you to propaganda and you are losing.

crony
noun, plural cronies.
1. a close friend or companion; chum.

In this context, such a close friend that they're willing to do something illegal. A crony capitalist is a person who is nominally running a business in a market-based economy who is actually collecting money from the government because of specific actions of a close personal friend actually in the government directing funds via contract. Nothing else qualifies.

It is illegal and specifically maligned over and above other forms of fraud because government is supposed to help everyone, not just people with friends in it, and because government contracts are supposed to be granted based on objective standards, in order to get the public the best value for their tax money.

People who are not crony capitalists: welfare recipients; EBT recipients; student loan recipients; student tuition grant recipients; Section 8 housing grant recipients; Social Security recipients; and unemployment insurance recipients (your brother).

Re:Finland

[bondsbw]

The ironic thing is that this is basic investing, that businesses should be glad to be doing. I don't get why this is not done more often.

To a company, that's not investing. It's kickstarter for people... free money with no ownership stake in the outcome. It puts the company at a big disadvantage to competitors--who aren't required to participate in the investment--if the company spends its profits on people who could just go work for a competitor or not work at all.

To a nation, it's more of an investment since there's a better chance that the people will stay in the country and keep their contributions within its borders.

(I assume you are not talking about company-paid education with strings attached, since that already exists and is used in many industries.)

Re:Finland

[MightyMartian]

Taxation is the only way any civilization can function. Taxation has been a feature of civilization since the beginning of civilization. Some of the earliest examples of proto-writing were basically ledgers used by early civilizations to track taxes.

Get over it. You live in the society, you get to pay a share for that society's function. Your liberty stems from the right to elect representatives to the legislative assemblies that enact taxation legislation. Your liberty does not extend to you not having a moral and lawful duty to pay taxes. Fuck off with your sociopathic selfish "I'm being robbed" crap.

US Already Has it

[sdinfoserv]

The US has already been giving a subset of citizens BI for years - and the result is horrific. American Indians receive basic income, free health care, free housing, and free education if they choose it - the result is the most impoverished areas in the United States.

Re:US Already Has it

[Dixie_Flatline]

I don't know what the situation is for your First Nations (American Indians) people, but here in Canada, the conditions are pretty terrible. The problem is the starting conditions are so bad, you're often throwing money straight into a pit. We have a reservation that's been under a boil water advisory for more than 20 years. No clean drinking water. A basic income does you no good when you're subject to conditions from a developing country.

Under-investment over the long term is probably worse than an initial period of over-investment. We don't give enough to fix the problems properly, so they cost us money for decades, like using duct tape to fix leaky pipes in your basement. Eventually the cost of all the fucking tape you've used is way more than you would've paid to just get the pipe properly handled. We need to figure out how much we need to pay, invest it properly, bring those under-served and marginalised people up to the basic level that the rest of us expect, and THEN we can talk about whether or not BI works in those communities. Right now it's just crumbs thrown at the feet of the starving and expecting them to be fed.

Re:US Already Has it

[drinkypoo]

The US has already been giving a subset of citizens BI for years - and the result is horrific. American Indians receive basic income, free health care, free housing, and free education if they choose it - the result is the most impoverished areas in the United States.

It really doesn't work the way you describe. They give the tribes money. The tribes decide who is and isn't an Indian, no shit. They can kick them right off the rolls. I don't know what it's like in every tribe, my understanding is that there is a whole spectrum of behavior out there, but what I've witnessed has been fairly horrific. You know, just like white people. But the point is, they're not doing what you say they're doing.

In addition, Native Americans are subjected to the same kind of abuse as African Americans, and then some other special kinds of abuse like having been forcibly relocated onto other tribes' land, and/or having their livelihoods forcibly destroyed by US government policy. Here in what is now Lake County, CA, the government paid the locals a dollar a tree to plant black walnuts which have not only never been an economic benefit to the region, but which you cannot actually live on — unlike acorns, which in and of themselves are a relatively complete food. This is to say nothing of the general policy of murdering the natives whenever they were found, which persisted well throughout the 1800s. General Vallejo (for whom several California landmarks are named) used to ride with Kelsey, for whom the town in which I live is named. Kelsey was a slaver and rapist whose wife famously helped the natives kill him and his men by wetting their gunpowder — I'm guessing his general infamous rapeyness had something to do with it. They'd go hunting "bucks"... and "squaws". In retaliation for his murder, the US 1st Cavalry was sent to the region. They went to the other end of the lake and massacred a wholly different band of Pomo who lived on an island there which is now called, yeah you guessed it, "Bloody Island".

The result is the most impoverished areas in the United States.

Re: Not unconditional

[unixisc]

And finally the social "safety net" becomes a hammock

I used to always be against social safety nets becoming hammocks, but I seriously don't know anymore. B/w automation and offshoring, a huge percentage of our jobs are gone, so it's not exactly an unwillingness to work that's driving unemployment numbers. Which is why a universal basic income like this Finnish experiment may not be such a bad idea. Give everybody the money they need to cover rent and food, and leave it up to them to decide whether they want to get more money to buy bigger things, such as a car, a house or whatever other toys they'd like.

On this Finnish experiment, it's not such a bad one. Yeah, there may be slackers who just wanna sit home and eat/sleep, for whom this would do wonders. And then others would join the work force, w/o feeling under threat of unemployment, so would probably perform better. One of the biggest benefits of this is that parents will be able to spend quality time w/ their kids, and maybe limit the amount of time they have on their phones or playstations. That alone would be worth all this money spent on a universal basic income

Re: Finland

[Hognoxious]

... small 3d printed basements.