Finland’s Basic Income Experiment Hopes to Reduce Poverty
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The problem of poverty is a global issue to worry about. Countries are concerned about the increasing income disparity among its citizens. Due to the rise of population as well as growing competition in all sectors of the world, the demand for employment opportunities is high but the supply is comparatively very low. This causes poverty as because of the lack of a source of income, a great number of people cannot afford the basic necessities. This shows that the basic income of these people is extremely low or almost nil. In order to curb this problem, Finland has decided to hold a social experiment. Finland’s basic income experiment will provide funds to the unemployed.

As this income experiment kicked off on January 1st, Finland has become the first country in the continent of Europe which will pay its unemployed citizens a basic monthly income. This social experiment will be conducted for a two-year trial in which around 2,000 people for observation are selected randomly. The people selected don’t receive basic income on a monthly basis. Such citizens will receive €560 ($587) every month even if after a while they attain a source of income. The people who receive this money don’t have to report to the officials about how or where they spent it.

In case these people are already receiving unemployment benefits, the amount will be deducted from it. On an average, the private sector income in the country is €3,500 per month. The country currently has an unemployment rate of around 8.1 percent. This is approximately 213,000 out of the 5.5 million people residing here.

Finland basic income experiment

Finland's basic income experiment is for the betterment of the unemployed citizens.

Benefits of Finland’s basic income experiment

The Finnish government agency KELA is responsible for the social benefits of the country. Olli Kangas of this organization stated that this experiment aims to abolish the disincentive problem of the unemployed population. The reason behind continuing the basic income even after the citizens acquire a job is that they don’t have the fear of missing out on something. It is an assurance that they will receive the given amount of money even if they start working. Such a person might refuse a low-income job in the fear of losing out on the respectable and stable monthly income. But by continuing the fund, it will encourage the person to work, irrespective of the pay scale.

Finland’s basic income experiment is a part of the measures to tackle the country’s unemployment problem by the center-right government under the Prime Minister, Juha Sipila. Kangas also claims that the government is planning to expand this income experiment later on. In future, it will concern low-income groups like part-time workers, small-scale entrepreneurs, and freelancers. Economic experts believe that this scheme will make unemployed people lazier. Despite this, the Finnish government feels that it will cut down on the poverty rate of the country.

Author
Carrie Ann is Editor-in-Chief at Industry Leaders Magazine, based in Las Vegas. Carrie covers technology, trends, marketing, brands, productivity, and leadership. When she isn’t writing she prefers reading. She loves reading books and articles on business, economics, corporate law, luxury products, artificial intelligence, and latest technology. She’s keen on political discussions and shares an undying passion for gadgets. Follow Carrie Ann on Twitter, Facebook & Google.

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