
Did Finland’s basic income experiment work? [video] - tagawa
https://www.bbc.com/news/av/world-europe-47092727/did-finland-s-basic-income-experiment-work
======
alkonaut
Basic income that isn’t universal is just a targeted handout.

A real universal basic income experiment has to be perpetual (so I don’t risk
my career and future by not working) and universal for a country (so you get
the effect on prices, jobs, rents, health, attitudes).

This is also why there may never be an experiment - the first experiment will
be the first true attempt.

~~~
runeks
And even if you run the “experiment” on a global scale for ten years, that’s
no guarantee that the next ten years will work out the same.

It’s really very simple: at our current stage of technological evolution, if
everyone stops working, we all die.

~~~
alkonaut
The most universal and perpetual you can make it is probably one country
(possibly e.g the EU or similar) and of course “perpetual” will only ever mean
“until political will changes”.

It’s important to remember that there is a massive difference between adopting
a UBI in a large welfare state like Finland as opposed to eg the US.

For a small UBI it’s effectively just a matter of first moving many different
systems into a single one.

When I was a student I was paid $600/mo or thereabouts to study.

Now I’m a well paid dev and parent. We get a child grant for two kids of
$300/mo and a daycare subsidy of around $2k per month for the two of them.

Those child grants/subsidies require no application or qualification.
Obviously under a UBI a lot of that would be shifted into the UBI instead so
instead of using subsidized daycare people would choose not to work for a
while.

So I think it’s entirely possible for some of the Nordic welfare states to
change to a UBI-like system. The payout might not be a living wage (as in this
experiment) but it could replace student grants, minimum unemployment
benefits, minimum pensions, daycare subsidy etc. For full time workers it
would just be a huge tax credit (probably offset by an even larger tax hike)

Meanwhile I think it would be extremely hard for the US to do the same,
because UBI without the intermediate step of a massive welfare state just
isn’t going to be easy.

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thomasfl
I cant't see how this experiment is set up, can give any answers to what
effects general basic income has on the society. A selection of only 2000
people seems too small. 560 USD a month is not enough to get by in scandinavia
either. If an experiment is going to prove that society wont't get ruined by
general basic income, then an experiment has to be done on a much greater
scale than this.

~~~
FartyMcFarter
I still don't understand how UBI will be paid for. If my calculations are
correct, even 560 USD per month would require Finland to increase tax revenue
by a third in order to fund it, if the UBI was provided to everyone in the
country.

That already seems hard enough. How realistic would it be to give even more?

~~~
Sharlin
Any realistic UBI scheme works by adjusting marginal tax rates to compensate.
Everyone gets the BI but it’s effectively taxed away from those with enough
other income. Assuming the BI replaces many of the current benefits, it can be
implemented by only slightly increasing tax rates for the highest income
brackets.

~~~
notahacker
That's a fairly optimistic assumption though.

Finland currently has unemployment at 5.4% and working age economic inactivity
(i.e. people who do not pay income tax but are also mostly not eligible for
benefits) is closer to 30%.

If the state is paying out the equivalent of a livable income to >5x as many
working age people as before that's a big increase in [net] income tax burden
on the employed. Given that many of these economically inactive people are not
looking for work by choice (probably because they don't need the money),
there's a big question over whether that's an income tax burden worth
imposing.

~~~
zanny
It is true that the best place to fund UBI is not from a pure income tax. In
the same way raising the minimum wage inflates the general cost of goods, but
at a lesser rate than the poorest earners see their incomes rise, having a UBI
with a (preferably progressive with annual per-capita credit) generalized
transnational / sales / exchange tax across the whole economy would work
better. That would include income, but it wouldn't exclude capital gains,
trade, consumer purchase, etc.

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Polarity
not enough money, not enough people and too short (you know its ending
somewhere soon, so you´re not really free. and the participents still seeking
for jobs, because the experiment is ending.). so this test is basically just
donating a bit of money to random people, not a basic income experiment (for
me at least).

~~~
leke
I didn't get picked for this, but if I did, like you say, I wouldn't have
started a business knowing it would end in 2 years.

~~~
artiscode
May I ask why not? In my opinion 2 years is plenty of time to validate a
business and see if it's ramen aka UBI amount profitable.

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botto
One part of UBI I still don't understand and have a hard time finding an
answer for:

If everyone gets a basic level of income no matter what, won't the base level
just be pushed up higher? So instead of a flat costing for instance $500 a
month, it will cost $1000 month because everyone can afford the $500 flat.

I can't see a scenario where a government doesn't have to increase the UBI
every year.

~~~
WheelsAtLarge
The law of supply and demand will always force the cost of goods to go up if
there is not enough supply vs demand. You're right there is no scenario,
without technological improvement, in the long term, where items get
affordable just because people have more money.

But there are some items that are in oversupply that would always be
affordable so giving someone money to buy it will probably help. I can only
think of virtual goods as goods that are always in oversupply. A place to live
is not one of those items.

~~~
cf498
A place to live is one of those examples i think, just not in the regions
which are in demand. With a declining population and a push to live in more
urban environments, there is quite a lot of living space in regions where its
not attractive to live. You can witness the trend in Germany where alot of
villages are dying out, as there are no jobs in the region and they are to far
off for people to drive every day to work.

I see, that the trend to increased rent prices balancing out UBI would apply
to in demand regions, but not at all in areas that would otherwise go unused.
Most countries do have an extreme oversupply of living space, even before a
population decline.

~~~
telchar
Let's go further with this. It's reasonable to assume that a UBI's cost would
have to be offset by increased taxes, this would have to be progressive or the
UBI would be pointless. So there would be a cutoff somewhere on the income
distribution where the UBI payment would be offset by increased taxes, let's
say at $80,000 to have a number. Making less than that, UBI would increase
one's total take-home. Making more than that, the tax to support UBI would
lessen one's total take-home.

The places with highly desirable real estate and high prices (e.g. SF and
Manhattan) are already unaffordable to people making less than $80,000. So UBI
would not increase the ability for residents to pay rent in those areas.
Rather, it might actually decrease their net income, so by GP's argument it
might lower rents in those areas. But in small towns (like City You've Never
Heard Of, WV) with a low median income, UBI would increase net income. So it
might increase rents there except those small towns are already emptying out
as people leave to seek high-paying jobs in big cities, as you said.

So I think UBI would lead to rental/COL costs homogenizing somewhat rather
than simply going up. It seems like this could solve several problems at once.

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pgt
Would universal basic income reduce crime by making it easier for employees to
decline immoral tasks?

~~~
dTal
Interesting question. I think one could reasonably expect it to decrease
_economic_ crime, where the motivation of the act is to avoid poverty and
starvation. This would include both compulsion by one's employer, and also
crimes of theft by the unemployed.

It may conceivably increase other types of crime, possibly in unexpected ways.
Give people time and freedom and just enough money to stay alive, and not all
of them will become artists or entrepreneurs. Many will just get bored. Some
fraction of those will direct that boredom in destructive directions, like
vandalism or drug use. Others, resenting the system, might find a sense of
purpose in political activism, which could lead to civil disobedience.

So I don't think it's easy to predict.

~~~
meruru
>Many will just get bored. Some fraction of those will direct that boredom in
destructive directions, like vandalism or drug use.

You have an excellent punishment option in that case that may well be more
effective than prison: remove their right to basic income :)

~~~
undersuit
I'm a fervent supporter of Universal Basic Income and that very threat is why
I want it Universal. Let's fix our societies' failings without the threat of
death, hunger, and forced exposure to the elements.

~~~
meruru
In the case of vandalism, I agree completely removing their basic income would
be too much, just fining them like we already do is enough. For things that
would land you in prison though, forcing you to have to work like you already
have to under the current system seems less cruel than the alternative. Note
that under UBI there's going to be a surplus of job opportunities that no one
will want to do like cleaning toilets and such. So it's less a threat of death
and hunger, and more a threat of having to resort to shitty jobs.

~~~
dTal
>under UBI there's going to be a surplus of job opportunities

I'm not so sure of this. If those jobs really need doing, then the pay will
just go up until they become attractive. There won't be open positions just
hanging around indefinitely, in case people decide they want a job.

I'm wary of making removal of basic income a punishment for anything - it
seems like a moral hazard. From my point of view, the entire point of basic
income is that abandoning people to their own devices, possibly to starve,
just isn't the way a well-to-do first world country should be treating people.
That argument doesn't change regardless of what crimes you've committed -
that's why most first world countries no longer have the death penalty and
regard it as barbaric.

Furthermore, if basic income becomes viewed as a revocable privilege instead
of a right, there will be great pressure to get more and more "undeserving"
people off it, ostensibly for their own good but really just to save money. We
already see this behaviour in the way the recent UK government has been
treating the people under its draconian "Universal Credit" system - since its
introduction, "unemployment" (as measured by claimants) has plummeted, but the
number of people on the street has skyrocketed. Clearly people in bad
situations are being booted out of the system, by hook or by crook.

You really don't want this attitude in your social safety net.

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petters
I think that to answer the question in the title, looking at two persons only
is the wrong approach.

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leke
I think it would be more interesting to see what people with jobs would do
with that money. As someone working in Finland who can pay rent, bills, buy
basic food, and other monthly essentials, it would be nice to have money left
over to actually spend on myself.

~~~
samiru
The money would be taxed away, of course.

------
kolbe
A six minute video of two anecdotes cannot possibly (and did not) answer the
question in this title. This is click bait garbage.

~~~
oska
Which is why I no longer click on BBC articles.

In contrast, the national broadcasting corporation in my own country (the ABC
in Australia) still does fairly good reporting.

------
Flip-per
TLDR: Misleading title, waste of time. "Finland is analyzing the results to
see what lessons can be learned." \- that's all the substance there is.

It's just a video of two randomly picked persons of this experiment, which
doesn't tell anything.

~~~
gamesbrainiac
Thats exactly how I felt at the end of the video. They just ended it, and now
they are analyzing the data. It does not say if they will restart the program
after their assessment or if they will just end it for good.

From the people in the video, what it seems to show is that it can give people
some confidence to pursue what they want to do, but at the same time, it does
not seem to permanently change their life.

I think a longer term study is needed. Furthermore, it is not clear if people
will start doing more altruistic work if they have UBI like contributing to
open source or working at a non-profit organization.

------
factsaresacred
I'm currently in an EU country receiving a 2 year stipend of 750 euros a month
as I attempt to build a business.

The magic of having that money come in each month is that it removes the
cognitive load of _uh oh, how do I survive?_ allowing me to fully devote
myself to work.

Rather than slack off, I work 16 hour days, 7 days a week.

It's not enough to have a social life, or do much of anything, and that's
fine. After all why would you be out playing if you've a business to run?

Perhaps it doesn't work on a wide scale, but for the sincere and serious,
basic income is a gift. And one that I believe every recipient is obliged to
repay in the form of job creation, tax revenue or some kind of contribution to
society.

In the same way that washing machines 'liberated' women in developing
countries[1], UBI could be a similar revolution - freeing up time and energy
spent in drudgery and reassigning it to (potentially) more worthwhile and
value-creating pursuits.

[https://www.forbes.com/sites/artcarden/2013/04/24/hans-
rosli...](https://www.forbes.com/sites/artcarden/2013/04/24/hans-rosling-and-
the-magic-washing-machine-a-lesson/)

~~~
ykevinator
This is a great use case for ubi. I also think the US should open Medicare for
small business. I think the biggest problem with ubi is the branding. It
should be billed as alternative social security or something. Using ubi for
starting a business is great. ( and good luck to you!)

~~~
factsaresacred
Thanks!

------
zeroname
TLDR: Two unemployed people are shown, each receiving 560€ a month with no
strings attached. For comparison, median income in Finland is 2900€.

The woman doesn't seem to have learned any trade (at least it's not mentioned)
and has only ever worked briefly at a factory. She took a job as a
telemarketer that she liked. As the program ends, her financial situation will
be unsustainable.

The man used to be a journalist and has been unemployed for five years. He's
still unemployed after the program ends and will now have to "deal with
bureaucracy again".

~~~
abledon
I love how they just didn't really do much and kinda slacked. People who think
UBI will include people voluntarily going out to work at jobs that aren't
fun... this study is a wrench in the works! I bet the younger generation will
play fornite, league of legends, or scroll insta/snapchat all day.

(I would have also liked to see the study actually show it being a sustainable
solution , but the ironic outcome is enjoyed nevertheless!)

~~~
oosjc9a5
My bet, based on what my heart says, is that if everybody could receive UBI,
almost all people will do absolutely nothing; levels of depression and mental
illness will go over the roof, which could very well end in violence.

Introducing UBI because of robots taking jobs reminds me of that quote, "For
every complex problem, there is an answer that is clear, simple, and wrong"

~~~
ykevinator
It's so little money that I don't think people would do nothing. I agree with
your concern about mental health. Sometimes well intentioned policy sets up an
environment that encourages behaviors that lead to mental health issues (the
opiod crisis for example).

------
escanda
Pretty surprising stuff since here in Spain the unemployed make about 400
euros a month _after_ they have ended their actual unemployment benefits. This
last resort income is for two years. They must attend courses on job skills
like cook, welder and so on though. All these courses are free.

It's not for life, but it takes out of poverty most people.

~~~
oosjc9a5
The problem with Spain is that there literally are no jobs, and those courses
are a charade.

~~~
xyproto
As long as there is a need to be filled (like food) and a way to fulfill needs
(like fishing), there are jobs.

There are plenty of jobs to be created, also in Spain.

~~~
oosjc9a5
First you are assuming that there really are needs to be filled. For example
in the case of fishing there are limits to how much you can fish, set by the
EU, which maybe we've hit already.

Second, jobs don't exist until they are created; saying that they could be
created doesn't help unemployed people. Someone has to take the (sometimes
very high) risk.

~~~
marcosdumay
And I bet that once somebody getting those 400 euros a month decides to take
that risk, they will not be entitled the support money anymore.

~~~
oosjc9a5
Of course, but in any case, someone who lives off welfare doesn't have the
money to start a business. The only option is to ask a bank for money, and
they won't give you shit if you're living off welfare.

~~~
marcosdumay
Some business require money to start, some don't. Starting some kinds of
business look pretty much like getting a job. (But then, there are also
certainly laws in place that put a few barriers on starting those last one.)

------
known
I think UBI should lead to self-actualization in
[https://en.m.wikipedia.org/wiki/Maslow%27s_hierarchy_of_need...](https://en.m.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs)

------
kgwxd
Could a virtual economoy be a better place to do a proper UBI experiment?
Maybe like a Tamagotchi MMO. I'd play it.

------
ransom1538
Will rent seeking landlords just raise rent? If everyone has a BS degree,
isn't that just the requirement?

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dnate
I'm very much interested in the findings. There is probably more to it than
this 5 minute video can show.

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newshorts
I’d like to see more case studies.

I could see people taking license to putz around for 2 years, while others try
and use the opportunity.

Is humanity mostly lazy or mostly productive?

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atemerev
Of course UBI “works”. There are some rich people who enjoy never having to
work, and they are quite happy with that.

The problem with it is that it cannot be universally sustainable.

~~~
ggm
Really? I mean sure has some unsustainable qualities but what if it turned out
it worked for long enough to carry into a different phase of the business
cycle?

~~~
atemerev
Retirement plans are already unsustainable, retirement age is raising
everywhere in the world. UBI is basically a life-long retirement scheme,
requiring at least 10x more resources.

~~~
sascha_sl
There's a difference between unsustainable and underfunded.

~~~
atemerev
Retirement schemes are currently funded with such creative approaches that
Enron would be ashamed of. No stone left unturned: continuous refinancing with
future taxes, securitization, implied zero default risk, assumptions of
constantly growing economy, and more. Even then, US direct social security is
25% of all budgetary expenses, and with Medicare/Medicaid it is around 60%,
much larger than anything else. Unsustainable means unsustainable.

~~~
logicchains
That's a problem with America's dodgy retirement scheme, not retirement
schemes in general. In Australia for instance, the government enforces
mandatory saving for retirement, but neither the citizen nor the government
are able to access the money before retirement:
[https://en.wikipedia.org/wiki/Superannuation_in_Australia](https://en.wikipedia.org/wiki/Superannuation_in_Australia).
This means that peoples' retirements are actually funded by real savings, not
by wealth transfer from younger workers, so it doesn't matter if the retired
population significantly outnumbers the working population. Singapore has
something similar:
[https://en.wikipedia.org/wiki/Central_Provident_Fund](https://en.wikipedia.org/wiki/Central_Provident_Fund).

~~~
ggm
I too am in the Australian Super. This (what you write above) is _mostly_ true
except there are moments in our system, the defined benefits hole for federal
employees which required the government to make a sovereign fund and the ever-
present question: where are the workers, to make money, which the
superannuation fund investment managers can then profit from, to pay out
super?

I was totally shocked when I learned about how bad the US superannuation
regulations are. Raiding funds. funds which invest in the company you work for
as their main investment. Permitting early access to funds for things which
might look neccessary but really underpin other systematic failures (cost of
homes/equity, medical bills for non-terminal diseases)

Aussie workers with a US fund incur costs, because the US fund isn't
recognized as a tax compliant super fund. And you get a long tail overhang of
the US IRS looking at your income on return to Australia.

------
hackandtrip
Italy is doing something similar - everyone with low income can apply to
receive "citizienship" income, something like 800EU a month.

There are strict rules to avoid fraud (that probably won't work, will explain
why): the State will give everyone that applied an offer for a private job in
different time spans and different distance - you can only avoid one time.
Main problem is - there are no jobs that will pay more than that income, and
people will try to avoid and keep the income for at least a year.

Surely, in my humble opinion, this is the way to go - together with stricter
regulations on non-specialized work, where enslavement is going towards
foreign population in EU countries.

~~~
dullgiulio
Oh no, that's not the case at all. The joke (comedian-led) government of Italy
is just misnaming unemployment benefits. They have a very foggy plan (and no
ability to actually execute it), but it would include plenty of people trying
to find unemployed a job close to home. Again, it's a populist joke.

------
WheelsAtLarge
I bet that it did not have a benefit. Giving money away without a stated goal
leads nowhere. The idea of basic income will only work if the receivers are
helped along to define what their goal in life will be. Most people have no
clue as to what they want out of life. Giving people free money will only make
things worse since now they lose the incentive to even try. At least when you
have a job you work towards completing someone else's goal. With a basic
income, you have no defined goal and you lose the stress of having to find
one.

People are talking about mass unemployment because of AI, something that will
cause societal chaos, so I can understand why governments and the elite would
want to push for a basic income. But it needs to be done in a way that will
not destroy people's incentive to help society.

We don't always see it but the only reason we have and are able to buy what we
need is because someone got up and did a day's worth of work. Imagine a future
where everyone has a choice of showing up to work. Some people will always
show up, some people will never show up but the vast majority will show up
depending on how they feel that day. A recipe for a chaotic society.

~~~
nugga
The finnish ubi thing was a joke because it's not nation wide and the amount
paid is marginal. I don't see how you can glean any relevant info from that.
Wonder what the ramifications are going to be if you're going to see stories
of failures connected to not-so-good UBI studies and how they're going to be
played by politicians or people against UBI?

>Most people have no clue as to what they want out of life. Giving people free
money will only make things worse since now they lose the incentive to even
try. At least when you have a job you work towards completing someone else's
goal. With a basic income, you have no defined goal and you lose the stress of
having to find one. [...] it needs to be done in a way that will not destroy
people's incentive to help society.

This part seems more legit. What is the goal in life? Enjoyment of sense
pleasure? Procreation? Creation of works of art? I don't know if the point of
life can be slaving away roughly third of your waking hours to fuel a gigantic
machine based on pointless consumption of material goods and the 'latest
shit'. Then again, I also don't know why we need 7 or 11 billion humans on
this planet doing those things and how it's going to be sustainable if more
and more jobs are being automated away and more and more people are still
supposedly going to be lifted from real third world poverty into low/middle
consumer class. No doubt on balance everyone should try to be a force of
goodness in this world, right?

>Imagine a future where everyone has a choice of showing up to work. Some
people will always show up, some people will never show up but the vast
majority will show up depending on how they feel that day. A recipe for a
chaotic society.

I think this is a false comparison. The owner/manager class and employers no
doubt are against ubi because it cuts into their power over others. In my
opinion the main benefit of UBI is 'strongarming' employers to having to treat
workers better because everyone gets paid enough to move on to greener
pastures if they find their jobs paying too little compared to how they are
treated or how they enjoy their jobs, allowing people from all walks of life
no matter their starting position to be more mobile in society.

With UBI you would get paid more the more you worked and that's an incentive
enough. Some people no doubt will cut back their hours or drop out of life
with a bong in their hand but that's on them.

How does the economy work anyway? Money has purchasing power somehow
correlated to the amount of effort people put into work and the cost of items
and services usually reflect a value of time and effort? Won't UBI simply
shift some of the ginormous cumulative pareto distorted amount the top
whatever% get for simply being at the top to the ordinary folks in the form of
a safety net? Productivity seems to be increasing throughout the history yet
somehow and arguably perhaps rightly they go to the owners and managers.

In a democratic society we can wrestle some of it back because everyone's in
this together like it or not and UBI could make for a fairer and less cut
throat society.

