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Basic Income is a subject that regularly surfaces in Soylent discussions, so here's a story about Finland's impending experiment with it:
Finland has become the first country in Europe to pay its unemployed citizens a basic monthly income, amounting to 560 euros ($587 US), in a unique social experiment which is hoped to cut government red tape, reduce poverty and boost employment.
Olli Kangas from the Finnish government agency KELA, which is responsible for the country's social benefits, said Monday that the two-year trial with the 2,000 randomly picked citizens who receive unemployment benefits kicked off Jan. 1.
Those chosen will receive 560 euros every month, with no reporting requirements on how they spend it. The amount will be deducted from any benefits they already receive.
The average private sector income in Finland is 3,500 euros per month, according to official data.
Also at The Guardian and swissinfo.ch.
(Score: 4, Insightful) by theluggage on Wednesday January 04 2017, @12:03PM
Could someone explain why a UBI (universal basic income) wouldn't simply drive up the cost of living by pretty much exactly the UBI amount?
If its calculated correctly, the vast majority of people will see their UBI clawed back in additional tax. Mostly, its going to be replacing benefits that people already get. If UBI greatly increases the amount of money in the average pocket, you're doing it wrong.
Yes, "will it scale" is a difficult question - you can't do UBI properly without massive, well-coordinated adjustments to the tax and welfare systems. Welfare needs to be cut back so that it only covers extra expenses due to disability etc., not the inability to work and income tax needs to be very finely tuned so that people on UBI still have an incentive to work, but people on higher incomes pay it all back in tax. Tricky. Then you need some sort of "remedial" scheme for the minority of people who just can't manage their own finances.
Also, the cost of this sort of state involvement in the economy is more state involvement, so things like price and rent controls might be needed. However, don't kid yourself that these are new issues - they apply just as much to the current system of welfare benefits. Remember, if you pay any sort of state support to people on low wages, you're effectively subsidising the businesses paying below-living-wages. Certainly in Europe (including the UK, for the moment) benefits to the "working poor" are probably a bigger problem than the minority of "scroungers" who "won't work" that the politicians like to use as bogiemen.
The Finnish experiment seems to be an investigation into the "incentive" effect targetted at people already on benefits - will UBI encourage or discourage people from taking paid work? - rather than a dry run of a full-blown UBI scheme. Reading between the lines in TFA, it sounds like Finland requires benefit recipients to account for how they spend their benefit money, whereas the UBI will be no-strings - so this experiment might make more sense in Finland than in other countries that just dole out welfare money to people who meet the criteria.
(Score: 2) by Immerman on Thursday January 05 2017, @03:32AM
I think the phasing from UBI net gain to net loss without disincentive is not so difficult as you imagine. It's true that as the incremental tax rate increases you take home less of each additional dollar you earn, but you're never in the position where earning an extra dollar actually costs you anything, which is what makes the current system such a trap. In fact, even if you imagine the incremental tax rate at the breakeven point is a whopping 33% (currently applied to income in the $190K to $413K range in the US), you'll still be taking home 2/3 of the next dollar you earn.
I also fail to see how you've got a credible slippery slope into needing market controls - you are not changing the supply side of the market for goods and housing, nor are you altering the demand side dramatically - most working-class people will see only a slight if any reduction in net income, and the impoverished were already largely receiving targeted assistance anyway. It's only those "in betweeners" transitioning from one group to the other that see a real change with a UBI.
Well, except for possible usage changes - for example I could see collective living scenarios becoming more popular. Several people sharing a big house can get you a lot more bang for your buck than separate apartments, but I seem to have heard that targetted housing assistance often precludes such arrangements.
There might also be a slight shrinkage in the available low-end labor pool at a given price point, as the UBI allows for more comfortable part-time employment - but considering the current unemployment/underemployment levels we'd have to see a dramatic shrinkage before worrying about a labor shortage. And even then, the solution is something free markets are great at - if you need more labor than you can get, offer more money and/or a better working environment to lure employees from your competitors, or to work longer hours.