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Finland's Universal Basic Income Called 'Useless' By Trade Union Economist (bloomberg.com)
An anonymous reader quotes Bloomberg:
Finland's basic income experiment is unworkable, uneconomical and ultimately useless. Plus, it will only encourage some people to work less. That's not the view of a hard core Thatcherite, but of the country's biggest trade union. The labor group says the results of the two-year pilot program will fail to sway its opposition to a welfare-policy idea that's gaining traction among those looking for an alternative in the post-industrial age. "We think it takes social policy in the wrong direction," said Ilkka Kaukoranta, chief economist of the Central Organization of Finnish Trade Unions, which has nearly one million members.
Since January, a group of unemployed Finns aged between 25 and 58 have been receiving a stipend of 560 euros ($600) per month. The amount isn't means-tested and is paid regardless of whether the recipient finds a job, starts a business or returns to school... Advocates say it eliminates poverty traps and redistributes income while empowering the individual and reducing paperwork... While limited in scope (it's conditional on the beneficiary having received some form of unemployment support in November 2016) and size (it's based on a randomly-selected sample of 2,000 jobless people), the Finnish trial may help answer questions like: "Does it work"? "Is it worth it"? And the most fundamental of all: "Does it incite laboriousness or laziness...?"
The trade union argues this UBI program would cost 5% of Finland's entire gross domestic product, making it "impossibly expensive."
Since January, a group of unemployed Finns aged between 25 and 58 have been receiving a stipend of 560 euros ($600) per month. The amount isn't means-tested and is paid regardless of whether the recipient finds a job, starts a business or returns to school... Advocates say it eliminates poverty traps and redistributes income while empowering the individual and reducing paperwork... While limited in scope (it's conditional on the beneficiary having received some form of unemployment support in November 2016) and size (it's based on a randomly-selected sample of 2,000 jobless people), the Finnish trial may help answer questions like: "Does it work"? "Is it worth it"? And the most fundamental of all: "Does it incite laboriousness or laziness...?"
The trade union argues this UBI program would cost 5% of Finland's entire gross domestic product, making it "impossibly expensive."
How do we measure the economics of the situation?
If people become indifferent to unemployment, trade unions have no reason to exist anymore.
Here's the thing - basic income CAN theoretically not work out... but some an economist with a stake or two against it working is NOT evidence that this version of it hasn't panned out. Especially when it's posted on fricken Bloomburg news!
That's what the experiment is for. Instead, it's to see if the money spend on THIS style of program is as effective as the several other programs it can replace, and whether that replacement will be practical. It's money that will be spent in any case! You need experimental comparison to judge the merit of the approach.
Again though - until RESULTS are in, hearing some talking head berate the idea of it as not to his liking isn't helpful.
It's like folks who dismiss needle exchange programs to reduce communicable disease, without actually bothering to look at the numbers, and what the studies actually account for.
Ryan Fenton
I think the original has been improperly translated.
I think a more accurate translation may be:
'How dare someone try a system that treats everyone equally, and isnt controlled by US!
Our research shows that the best trade union members are poor and unhappy, we need more people like that!
The LAST thing we want is a feeling of happiness and satisfaction for our members, they they may not need us,
and if they dont need us, then how will we be able to take their money so we can live the high life?
No, UBI is a terrible, horrible idea, bad for everyone who matters, which are the leaders of our trade union movement!'
I haven't seen anyone come up with a good reason people wouldn't use basic income to work less and be lazy. I can tell you, if I had guaranteed income for life, I would probably not ever work again.
"First they came for the slanderers and i said nothing."
UBI is very different when the sum is enough to live or not.
If it is too low (and at 560 euro/month it is certainly too low to pay housing and food), then people still have to accept any job to live, and employer can pay less because decent living costs are already partially covered by UBI. In such a situation, UBI acts as a social support to employer without taking any power from them.
OTOH, with a UBI high enough to cover basic needs, things change a lot. Employers need to convince people to enroll them instead of the other way around, while people can also choose to start businesses that have social benefit without being profitable.
Of course that consideration do not cover the huge question: how to find the money for high UBI? Some specialists consider a high UBI possible if all national labor costs are socialized: Instead of paying employees, employers contribute to a labor fund which in turn pays UBI to people. I have no idea if this is workable or not
Well, if none of what you do earns any income, people will say it isn't work.
How do we measure the economics of the situation?
That's a very good basic question to ask.
Too many times people get up on the soapbox of the world and give their opinion about this or that policy, and one can never figure out whether they are experts speaking from experience or just political hacks.
People giving an opinion in public is just noise, and people bolstering their opinion with rationalization and/or analogy is noise masquerading as signal.
We shouldn't give any credence to anyone who tries to sway our opinions about, well... anything, unless they can back it up with facts that are suggestive or studies that can be examined in detail.
I'm especially suspect of the "it will only encourage some people to work less" comment, as if that is a bad thing. It might be perfectly acceptable for some part of society to have to work less, or perhaps not to have to work at all. There's a parallel and opposite rationalization that holds that people will accomplish great things when given enough leisure.
Making that statement ("some people" is an obvious attempt at being divisive, as in "you know the type of people I mean") in the way that he made it is simple emotional manipulation. Also from the article are such gems as "We think it takes social policy in the wrong direction", meaning basically "I don't like it, in an unspecified and indeterminate way".
He's not claiming that it doesn't work, he's claiming that he doesn't like it (and neither should you).
So, you think sickness benefits, unemployment benefits, state pensions, etc are somehow not 'giving money out'? They are somehow 'measured'?
The whole point of a (properly designed) UBI is to replace ALL of that, with a single right of income.
The advantages include removal of the huge amount of bureaucracy, management costs, corruption, and fraud.
Basically it means everyone gets treated EQUALLY, and you would be amazed how many people hate that idea.
Usually because THEY want to be the ones deciding who is 'worthy' of support.
The cost is self-adjusting, because basically all countries have graduated income taxes, and UBI is also taxed, so people with large incomes
just end up repaying most of it in tax anyway. A country should use a combination of personal tax, and savings from the scrapping of all the broken
other forms of social benefits to fund it.
Of course that is putting it simplistically, however that is the formula of a true UBI, which many haters (usually those who currently profit from control
of existing welfare schemes) work very hard to ignore.
UBI is not 'free money for all', it is an acceptance that welfare is a sensible right in society, so we should remove the broken and inequitable systems
that current exist, covered in bandaids, and replace them with a simple single system that treats everyone equally, is low cost to manage, and almost
by definition free of corruption and fraud, because it is so simple..
I haven't seen anyone come up with a good reason people wouldn't use basic income to work less and be lazy. I can tell you, if I had guaranteed income for life, I would probably not ever work again.
Here you go.
You have to realize that "work" may not be going out and doing a 9-to-5 job in the traditional sense. Newton made a bunch of his discoveries while on forced leave from Cambridge due to the plague, and there are many historical examples of well-to-do scientists and explorers and artists who made great discoveries because they had the leisure and means to do so.
Stephen King was dirt poor for much of his early life, but he still wrote because he loved writing. Imaging how much more he could have contributed to popular literature if he didn't have to take back-breaking jobs as a young man to make ends meet.
Not everyone will be Newton or King, but anyone who takes up a hobby or minor occupation and becomes really good at it might extend the frontiers of that area. All of this has the potential to enrich our society and further our scientific knowledge.
"If you do not have basic security you cannot be rational,"
Exactly.
Not only does SAK say that the system may reduce the labor force -- for instance by tempting mothers of small children or those close to retirement to take more time off -- but the union also suggests that making it easier to refuse unpleasant jobs may create inflationary bottlenecks.
We have automation so that we didn't have to perform unpleasant of dangerous jobs! Not enough workers? AUTOMATE IT! Can't automate it? Pay people what the job is actually worth!
This is how the future should work.
Anons need not reply. Questions end with a question mark.
Here's the thing - basic income CAN theoretically not work out... but some an economist with a stake or two against it working is NOT evidence that this version of it hasn't panned out.
Business folk (the type that like exploiting cheap labor) are terrified they are going to lose their leverage on people so they are summarily declaring it a failure. It could have been the single most successful thing on day one and they still would have declared it a failure because it's a threat to their way of life. That is to say that their way of life is exploiting people's food/housing insecurity, the modern form of slavery.
Anons need not reply. Questions end with a question mark.
Most business folk are not the ones most keen to take improper advantage of people. Sure they make a business decision to move where the labor is cheaper
And you have contradicted yourself.
Anons need not reply. Questions end with a question mark.
Using money as a means of determining quality of life is like using lines of code to determine the quality of a developer. Zero is universally considered bad, but once you get past a threshold, increasing the number may very well make things worse.
and a lot of them will do exactly that. Your economy loses whatever productivity they might have contributed, socialists get more dependent voters to re-elect looters, and their kids grow up believing the world owes them a living.
You have only to look at the effects of multi-gerneration welfare dependents in the USA and the UK to know how destructive this is.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Some people think it will work very well, some people think it'll be a total failure, and of course some people are in-between.
For anyone here in EITHER of the first two groups, you both think the results would be pretty clear cut - the result won't be ambiguous. Here we have an actual experiment to test it, and there are other similar experiments being done or planned. Here's a chance to prove that you're right, and possibly in a measureable way such that those who disagreed have to admit their prediction was wrong.
Are you smart enough, and do you understand the issues well enough, to come up with some fair criteria by which to judge the outcome of these experiments? Can you mark a goal line and say "the experiment will show that UBI does A by x%, without doing B by y%"?
Since you understand the issues, that means of course that you understand the opposing viewpoint, you understand what their concerns are. Since you're pretty sure you are very much right, you should be able to be a bit generous in marking the goal lines. If anyone can come up with some fair measures we can later use to see who is right and wrong, I'll post my prediction and if I turn out to be wrong I'll freely admit it.
That would be really cool if we could do that. I don't have too much hope - I think a lot of people shooting their mouth off don't understand at all what people who disagree are saying, and have no interest in understanding anything other than their own guess. The ad hominem attacks which are already so prevalent on very page strongly suggest that some commenters haven't a clue what the other group is trying to warn them about, and don't care to know.
Anyway, there are experiments in progress. Anyone have an idea of some fair to generous criteria by which to judge the results when it's done, can you set a goal line which those who disagree might think is a fair goal line that captures their concerns?
It's not as if that 'extra' money suddenly leaves the economy. Given the subsistence levels of cash we're talking about, it is pretty much guaranteed that all of it will be spent quickly.
This is a point that is often lost on a lot of people. People who have little money are fantastic at spending it. From an economics point of view they are the ideal consumers: if they happen to save money it is almost guaranteed to be for a specific larger purchase in the near future. Otherwise they are going to spend all their money locally (no fancy imported Russian caviar or trips to remote countries) and soon.
There have been and are projects in Africa that specifically just give money to poor families and it seems to be working very well. See for instance:
https://www.givedirectly.org/r...
Barring emotional arguments such as 'but Western poor people are different' the fear for giving poor people (marginally) too much money is simply unfounded.
Ironically, the 1% richest of any country already have their basic income for sure and it seems to work out fine for them. Maybe some of them work less (Richard Branson?), but I've never heard some billionaire call out his fellow billionaires that they are just lazy and don't contribute enough to society, and most of them seem to work no less than anyone else.
Norway has a population of 5.2 million people, or .1% of the population of the US. The Government is much smaller than larger countries which reduces the amount of bureaucratic layers that can be corrupted. While I would agree that the US Government is much larger than it should be, it's also larger by necessity due to population and landmass differences. In other words, what you can do in Norway does not translate to what you can do in any other Government larger or smaller.
The majority of the corruption in the US does not come because individual people are dishonest, it comes because politicians and bureaucrats are dishonest. The people in Government allow the system to be gamed because they benefit from the arrangement. People on Welfare of all types are dependent on the Government for sustenance, and will continue to vote for people who give them stuff. Sadly this is not really a parasite and host situation, it's two parasites with the host being everyone else in society. As an easy example, we should be able to simplify our taxes to a few lines. Look at the reaction when people say "you can't take away _my_ individual tax credit" when ever it has been tried. IRS agents and politicians are happy, lawyers are happy, the people who complain feel like they get something back from the system, and a very large number of people see it for what it is. Government bloat which we could do without.
The Welfare system has in turn created a different problem, which is that countless people living on the system no longer have opportunity to get off the system. Factories, Shops, and stores all closed up from lack of employees. Given the early choice of "welfare or work" large numbers of people went to welfare so those places had to close . No workers, no fluid cash in that area, no way to run a business. Now that the money is drying up we have major problems in densely populated areas because people can't work. Making things worse, we have no money to spend on Welfare (US Debt is 20Trillion cash and 220Trillion in entitlements).
I'm also not sure Finland has done the same thing with money set aside for pensions like the US has. US Social Security is an empty vault full of IOUs for the general fund instead of being saved and interest compounded for the people who put money into the system as it was sold to the American people.
At any rate, you can't say that Finland should be the model for the world because Finland has considerable problems even though they are a very small country. In some ways better than the US, but I know and work with people from Finland who moved to the US because Finland has high unemployment and little chance for economic mobility. A 60% income tax rate ensures that fact.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.