Finnish Social Insurance Institution (Kela) has now big plans to give away every citizen a monthly paycheck of $876 and remove all benefit payments. The agency hopes that the unusual move would fix a failing social security system and encourage young people to get back in the workforce.
The money would be paid to all Finnish adults regardless of their employment status or income. The European country’s joblessness rate is currently at record-breaking levels with more than 20 percent of young workers lacking a job and 10 percent of workforce being put on hold.
Finnish workers often report that they would rather stay home and receive welfare payments than getting an underpaid temp job. Thus, the government hopes that the $876 paycheck should entice them to get a job without the fear that their income may shrink.
A recent survey funded by Kela shows that nearly 70 percent of citizens consider that a national basic income could fix some of the country’s economic issues. But critics say that such an income would further deter people from working.
Yet, supporters of the move cite previous similar experiments that were largely a success. For instance, a town in Canada, Dauphin, embraced the idea of a basic income nearly five years ago, and the outcome was satisfactory on both societal and economic level.
The country’s prime minister backs the recent proposal because in his opinion it would simplify the Finnish social security system. But critics believe that the price to pay is too high – about €47 billion every year.
In Europe, other countries are following suit. Netherlands’ city of Utrecht announced a similar move, which would benefit only welfare recipients. As of January, 250 people that do not have a job would be granted a monthly paycheck for their daily expenses, while city’s investigators would study the effects on unemployment rate in the city.
Switzerland is also pondering on this, but Swiss lawmakers opposed the proposal of an ‘unconditional basic income’ three months ago. Yet, population will have the last word on that since a public vote is scheduled for 2016. A recent survey showed that nearly half of respondents favor the proposal.
But in Finland, the stakes may be higher. Unemployment is at record levels, GDP growth is flat, while the country struggles to exit a three-year economic crisis. In a recent report, the country’s finance ministry deemed the situation ‘serious,’ and estimated that economic recovery would be ‘painfully’ slow even if Finland manages to escape recession.
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