One year on: Is Finland’s free money experiment working?

A routine trip to check the mail took an unexpected turn for Mika Ruusunen in November 2016.

"I opened it and I didn't understand it at all, so I gave it to my wife and asked her what the heck is this," Ruusunen said.

It was the Finnish government informing Ruusunen that he would start receiving free money each month as part of a first-of-its-kind experiment - writes cnbc.com.

Ruusunen was among 2,000 unemployed Finns randomly selected from across the country for a trial testing universal basic income. Each month for two years he would receive 560 euros (roughly $670) from the government, tax-free. He was free to spend the money however he liked.

"I'm not accustomed to that kind of bureaucratic freedom," Ruusunen said.

Benjamin Hall | CNBC

Mika Ruusunen was selected to participate in Finland's universal basic income trial.

Less bureaucracy, more flexibility

Reducing bureaucracy in the welfare system is one of the main aims of the universal basic income trial in Finland. The government is testing whether basic income is a more flexible policy than existing welfare programs for providing assistance and work incentives to an evolving workforce.

"It is assumed that this would be a policy that could activate people through different mechanisms and, well, we want to find out if that's the case," said Miska Simanainen, a researcher at Kela, the government organization overseeing the trial.

Finland's universal basic income experiment launched January 1, 2017 and will run until the end of 2018. Official results from the trial won't be released until it concludes. Experts said it's not surprising the Nordic country known for its generous welfare benefits, like universal free education, is at the forefront of a new economic experiment.

"We have had political discussions on basic income for many years, actually, for a couple of decades in Finland," Simanainen said.

The idea of free money has become more popular in recent years thanks to advocates in Silicon Valley like Elon Musk and Mark Zuckerberg. They see universal basic as a cushion for workers whose jobs might be replaced by automation or robots. Advocates argue free money could provide workers with flexibility to retrain for a new career, pursue creative interests, or start their own business.

What is universal basic income?1:49 AM ET Thu, 28 Dec 2017 | 04:22

A key goal of the Finland experiment is to give unemployed people incentive to work by providing them with financial assistance even once they're employed. Researchers chose the 560-euro monthly amount because it roughly equals the current level of unemployment benefits.

"One main idea behind this version of basic income that we are testing is that it would replace the basic social benefits or at least basic unemployment benefits," Simanainen said.

A 'win-win situation'

Trial participant Mika Ruusunen had been unemployed for 16 months before he decided to go back to school to retrain for a career in IT. He had just landed an internship at a tech company when he found out he was selected for the experiment.

Ruusunen will continue to receive the free money each month even now that the company has hired him as a full-time worker.

"Before I get my current job I was already thinking about starting my own enterprise, and it's nice to know that I have still that option," he said. "The basic income encourages people to do work, even [a] part-time job or lower income positions. It's kind of a win-win situation for society."

But not everyone in Finland sees the basic income experiment as win-win, especially if it encourages workers to accept low-wage work.

Benjamin Hall | CNBC

Finland is conducting a national experiment testing universal basic income.

"Our path shouldn't be to create low-wage jobs but to really improve education and to improve people's skills," said Antti Jauhiainen, author of the Finnish book "The Welfare State Strikes Back."

Jauhiainen favors universal basic income but sees it as an added benefit versus a replacement for the current welfare system. He said that by targeting a small set of unemployed individuals, the trial is the "wrong approach to a hugely important idea."

Ruusunen agreed the trial should be expanded beyond people who are unemployed for it to be a true universal basic income. He's optimistic the idea will have a prominent place in Finland's future.

"I think that about 100 years from now the people will see basic income as the same kind of thing as a universal suffrage," he said. "I'm actually very proud that Finland was one of the first countries where it was tested."

Read more news of Helsinki on our site.

freemoneyexperimentworking Finland
If you notice an error, highlight the text you want and press Ctrl + Enter to report it to the editor
1 view in november
I recommend
No recommendations yet

Comments

Post your comment to communicate and discuss this article.

Society
A citizens initiative demanding the end of diesel tax met its target for 50,000 signatures in just one day, six months ahead of schedule. Cities across the world might be looking for ways to reduce the use of harmful diesel engines, but in Finland there appears to be a groundswell of popular support for the dirty fuel. On Monday Tuulikki Paavola published a citizens initiative demanding an end to Finland’s diesel tax was published, with the goal of getting...
Society
The winners of the first edition of the European Capital of Smart Tourism competition were awarded 7th of November at a ceremony in Brussels, on the occasion of the European Tourism Day. The title for 2019 was awarded to two cities: Helsinki and Lyon. Cities of more than 100.000 inhabitants were eligible in the first edition of this competition. 38 cities from 19 EU Member States applied, but Helsinki and Lyon stood out for their innovative tourism measure...
Society
Alexander Stubb (NCP), a vice-president at the European Investment Bank (EIB), has hinted at the possibility of returning to politics after losing the race to become the lead candidate of the European People’s Party (EPP) to Manfred Weber of Germany. Stubb received more votes than expected but lost to his rival candidate by a clear vote of 127 to 492 at EPP Congress Helsinki on Thursday. “I got a very good feeling [from the campaign], I must admit,” the fo...
Politics
The Finnish government will introduce no amendments to legislation on patient data during this electoral term, assures Annika Saarikko, the Minister of Family Affairs and Social Services. Saarikko and Kai Mykkänen (NCP), the Minister of the Interior, have participated actively in public debate concerning a legislative proposal that, according to Helsingin Sanomat, has been drafted in secrecy and would grant police significantly wider access to sensitive pa...
Society
School groups could in the future use public transport services in the Helsinki region free of charge when travelling with a teacher, according to a decision made by the Executive Board of Helsinki Region Transport (HSL) on 30 October 2018. The final decision on transport charges, including tickets for school groups, will be made by the HSL General Meeting on 27 November.  From the beginning of 2019 onwards, municipal school administrations would no longer...
Society
Finland has dropped to eighth in the world in the latest version of a ranking of countries according to their English language skills. Finns are now the worst English-speakers in the Nordic countries, according to the EF English Proficiency Index. The 2018 version of the ranking puts Finland in eighth spot, with western neighbour Sweden topping the comparison. This year’s result is the weakest Finland has achieved in the ranking, which has been published e...
Society
The theme of next month's Independence Day ball at Helsinki's Presidential Palace will be climate change and environmental issues. The theme of this year's Independence Day reception will be climate change and the environment, according to the Office of the President of the Republic. Finland's most exclusive social occasion is just one month away, and the Office of the President has started sending invitations to some 1,700 guests for an evening that tradi...
Society
The day's papers report on unsolved thefts, free head lice medicine for families and Angela Merkel's visit to Helsinki. Daily Helsingin Sanomat reports that most larcenies go unsolved in Finland. According to statistics by the Police University College, police were able to clear 3,150 offences between January and September of this year, while about 41,500 remain unsolved. In 80 smaller municipalities, especially in Lapland and Åland, the police did not sol...
Society
Finland's Tax Administration reports that 15,000 more eligible taxpayers declared no taxable income in the last two years, putting the total past 160,000 in 2017. https://yle.fi/uutiset/osasto/news/steady_increase_in_declarations_of_no_taxable_income/10492154 The number of eligible taxpayers who reported no taxable income in Finland has risen by 15,000 in the last two years to a total of 161,000 in 2017. "Most of the people declaring no taxable income are...