Basic income — the concept of giving people money with no strings attached— is having anything but a basic year.
Three months ago, the Dutch city of Utrecht announced it would launch a program to give people on welfare unconditional free money. The plan was so popular that it has spread to more than two dozen Dutch towns.
Now Finland wants in on the action.
The big difference: the country wants to give money to everybody, not just people on welfare.
In response, the Finnish Social Insurance Institution, known as KELA, has proposed an experiment to allot a monthly income of 800 euros (or roughly $870) tax-free. The cash will act as a replacement for other social benefits like housing and income support, but people will get it whether they work or not.
In other words, free money for all.
If approved in 2016, the project would begin with a pilot program in which people receive 550 euros per month and retain their benefits, before the model moves on to the real thing. The majority of Finnish residents support the plan, according to a recent survey.
In purely democratic countries, like the US, basic income has remained on the fringes for decades. The Nixon administration tested out a form of the basic income model in the 1960s, but was met with little success.
“The biggest challenge for the basic income movement is convincing the larger public that it makes sense to redistribute economic resources to provide a basic income to all,” Almaz Zelleke, a basic income expert and associate professor at NYU Shanghai, tells Tech Insider. It involves “persuading the public that a basic income should be viewed as a basic democratic right, like the vote.”
In socially democratic countries, like the Netherlands and Finland, that idea has more legs.
Under KELA’s proposal, Finns could take in additional income on top of the 800 euros, although it would not be tax-free. But given Finland’s already high income tax rate, that fact alone could sway people come the formal vote in 2016. Today, someone making 70,000 euros a year in the country can easily see half of that salary disappear as tax.
Basic income’s greatest appeal in countries like Finland is that it provides yet another safety net for people who’ve fallen on hard times. It signals to people that their government trusts that they want to work, but might not be able to. More practically, it gives them the cash to get back on their feet.
The research suggests this does happen.
One 2013 study showed implementing a basic income model for four years in Uganda led to people working 17% longer hours and receiving 38% higher earnings, mostly from the growth of small businesses.
However, some are skeptical Finland’s proposal is viable.
Given the average monthly income currently stands at just over 2,000 euros, a reduction to 800 might cause some to bristle at such a steep pay cut. Plus, there is legitimate uncertainty whether the Finnish government can keep everyone on its payroll. One estimate puts the cost at 52.2 billion euros a year, despite a projected yearly revenue of just 49.1 billion euros in 2016.
According to Zelleke, the future of basic income still shines bright.
“Basic income is being more widely discussed than ever before,” she says. “Ultimately, it’s the conversation about what a basic income could mean if permanently adopted on a national or regional level that will bring about change, not the results of another temporary pilot.”