The term “basic universal income” is yet another ten-dollar-term for wealth redistribution. The idea is that every unemployed citizen will receive a basic “income” from the government. Some in favor of the proposal hail it as a safety net, claiming it would act as an incentive and boost job rates by giving people some breathing room when they’re in between jobs.
Obviously it’s just another way of redistributing wealth, but the program has been floated in several American cities already as a “solution” to poverty and a way to close income gaps between the rich and the poor.
Finland launched it’s own basic universal income pilot program in January of 2017. Two thousand unemployed citizens were given a monthly “wage” of about $685USD. The experiment was intended to last two years, with the hopes of making it a permanent feature of Finnish life.
Now comes word that Finland’s government will not renew the program after it’s second year. Government officials are denying that the program was a failure, although no official numbers have been released. Their intent was to kickstart their stagnant unemployment rate – which is currently over 8% – by injecting more dollars into the economy. However, a basic knowledge of economics and human nature would indicate that most human beings are not incentivized by free money, but rather de-incentivized. It isn’t hard to imagine that the program participants did little to secure full-time employment knowing that their basic needs were already provided for.
However, even if one does choose to believe the official line that the program was a failure it’s obvious that funding the program on a permanent basis would be a heavy burden on Finland’s taxpayers. A study by the Organisation for Economic Development and Co-operation suggested Finland would need to raise it’s income tax by at least 30% to support a universal basic income.
Swiss voters recently voted down their own universal basic income proposal – a plan that would have provided every unemployed citizen with an astonishing $2,588USD monthly. Perhaps Finland’s officials sensed their own voters would do the same and didn’t want to risk the political fallout.
Whatever the case may be, it is true that in politics a bad idea never really goes away. Here in the U.S. some private business owners have already begun to fund their own universal basic income trials.
Y Combinator will select 3,000 individuals in two US states and randomly assign 1,000 of them to receive $1,000 per month for three to five years. Their use of the unconditional payments will be closely monitored, and their spending compared with those who do not get the basic income.
It should be obvious to any rational person how that experiment is going to end up, but it’s their money so more power to them.