While Universal Basic Income (UBI ) has been proposed in various forms all over the world, very few examples have been large scale.
This idea is being scrutinised increasingly as automation improves.
It covers the essential expenses of every person, and is not means-tested.
Various levels of payments have been mooted, with some suggesting a level of £1,000 per month in the UK.
However, critics argue that it could be prohibitively expensive and would demotivate many workers from going to work.
In 2020, a study found that a UBI experiment in Finland made people happier but did not improve employment levels and would be ‘unsustainable’.
2,000 unemployed people were given a €560 (£490) basic income every month in a two-year trial to see whether the system would work better than traditional benefits.
Finland put €20million (£18million) towards a two-year trial of a basic income – but prime minister Sanna Marin (pictured) does not plan to introduce one
Researchers found that participants in the Finnish study were happier with their lives, and they felt less stress, depression, sadness, and loneliness.
However, the Finnish study revealed that handouts led to only six additional days of employment over a 1-year period.
Although Sanna Marin, Finland’s prime Minister does not intend to create such an income but her health minister stated that the experiment could be helpful for future social safety reforms.
A universal basic income is argued by advocates. It cuts down bureaucracy and encourages people to work part-time or temporary jobs, even if benefits are not cut.
Finland’s traditional unemployment benefits are able to be terminated once the recipients start earning income.
The experiment involved people being given the money regardless of their ability to work. They were also free to use the money as they pleased.
Research showed that people who had the money felt more positive about their wellbeing than those without it.
“They had also a positive view of their cognitive capabilities, i.e. According to researchers, memory, learning, concentration and attention were all improved.
Participants were also more likely to trust others and the institutions.
In Finland’s study, 2,000 unemployed people were given a €560 (£490) handout every month in a two-year experiment to see whether the system would work better than traditional benefits
But Kari Hämäläinen of Finland’s VATT Institute of Economic Research said the basic income had only a ‘small’ effect on employment levels.
These results show that many people don’t have to deal with bureaucracy, financial incentives or other obstacles to getting work.
Bloomberg reported that it would cost a lot to create such an income throughout the country.
The Helsinki government allocated €20million (£18million) to the two-year trial.
The Paris-based Organisation for Economic Cooperation and Development, (OECD), has claimed previously that a basic income program in Finland wouldn’t be financially viable and would leave substantial numbers worse off.
Similar plans have already been tested in India, Canada, Kenya and other parts of the United States.
2017 saw the rejection of a proposal to universal basic income by Swiss citizens. Critics had accused the plan as rewarding lazy people and being stupid.
Although the Finnish trial was one of the most extensive in Europe over the past few years, participants were only allowed to apply if they are already employed.
This experiment was initiated in 2017. However, it has gained extra importance because of the growing demand for universal basic income.
Due to disastrous output slumps, many countries around the globe will be affected by this global economic crisis that is expected to result in tens of thousands of job losses.
Additionally, experts suggest that people are more likely to comply with public health advice when they have the assurance of an income.
In some countries, temporary basic incomes have been introduced by sending cheques to people as part of their stimulus programs.
Finnish trade unions demanded that employers pay living wages, which are not dependent on benefits, before the outbreak of coronavirus.