General idea
The Finnish Social Insurance Institute has recently published the results of an experiment on such a universal basic income.
This study has been analyzed in Finland and it is the largest experiment ever carried out. We will now proceed to study its results which, surprisingly, have been neither bad nor good, we could qualify it as neutral.
How have you managed to implement it?
The experiment has been conducted between 2017 and 2019, and it has been carried out on a total of 2,000 random people from all over the country.
Those beneficiaries were unemployed, so we have not seen what effect it would have on the middle – upper classes.
These people were provided with a fixed income by the government, totaling 560 euros per month for two years. It is not a clear example of Universal Basic Income but we can get an idea.
The Universal Basic Income consists of granting all citizens of a country a fixed income from the government to meet their basic needs.
As benefits of this income, we can say that it mysteriously increased employment. The control group analyzed, worked a total of 78 days between 2017 and 2018, while the average of the population, was 73 days.
We can say then that, despite being a small amount of money, it somehow incentivizes people to work more (we can interpret that such income can be used by them to commute to their workplaces or to be able to complement it with a working salary).
If we talk about the standard of living, the established control group placed it at around 60%, while the general population places it at 52%. It improves, but not enough to “shoot rockets”, it helps but does not improve social welfare 100%.
Similarly, the self-perception of mental state improves; of the group analyzed, 22% considered themselves to be depressed compared to 32% of the normal population.
Personal conclusion
In our humble opinion, we can conclude that the universal basic income has no negative effects, it does not seem to solve the existing social problems but it helps.
At the beginning we believed that this income could present problems such as:
- Everyone receives such income, there would be people from higher social groups who do not really need such income.
- Some people might not look favorably on working to earn a salary while others who do not work also receive the income, i.e., it could be an incentive to stop working.
- Companies could lower their workers’ salaries because they understand that their workers would already receive a minimum living wage from the state, and they could lower their salaries in compensation.
- The increase in taxes, since the government does not have infinite money, must be financed by some means and, in this case, they could raise taxes on citizens in order to maintain this income for an indefinite period of time.
The truth is that we have not seen this reflected in the population. We have not seen magical results, people’s situation is improving, but not in its totality.
On the negative side, the sample is too small to predict with certainty whether a fixed salary for the whole population could be really positive.
Also Finland is not a normal country, it has impeccable social measures that many countries in the world would like to have.
Conclusion
Actually, the universal basic income consists of taking money from you through taxes, to give it back to you later on…
We should ask ourselves what would really happen if taxes were taken away directly.
Do you think the situation would improve? What do you think about it?
