In January, Finland became the first European country to pay their unemployed a set monthly sum, as part of a social experiment centred on the idea of Universal Basic Income (UBI). The two-year scheme offers unemployed Finns between the ages of 25 to 58, €560 (the equivalent to £475) a month, which will continue to be paid even if they find work.
But what is Universal Basic Income? And could it really work in the UK?
UBI replaces pre-existing social benefits, by instead giving the unemployed a monthly amount to spend how they wish. Although Finland is not publishing official results of the scheme until after it finishes in 2018, Kela, Finland’s social security body, strongly believe this money will help reduce poverty in the country and even curtail unemployment, by encouraging those receiving it to find a job.
Most recent statistics from the Labour Force Survey (LFS) set unemployment rates in the UK at 4.3 per cent from June to August of this year. Despite being only half that of Finland, whose unemployment lies at 8.1 per cent, this equates to around 1.44 million people in Britain without a job, which certainly makes UBI worth consideration.
UBI would help alleviate the humiliation felt by so many Britons on Social Security, at barely having enough money to get by, let alone look to fulfil future plans. It would allow them to invest money where they deemed fit, be that in making drums, as one Finnish man chose to do, or just on food and rent. Either way, this system would give people the freedom of choice that current benefit systems lack. Economist Stewart Lansley reiterated this point, suggesting that certitude of income during times of economic uncertainty would ensure that individuals had “financial independence and freedom…while [also] recognising the huge value of unpaid work.”
Our current benefits system requires the unemployed to regularly report to authorities to prove they still need the money they are receiving, as well as demonstrating that they are actively seeking employment, which often carries with it a further sense of shame. Through the implementation of UBI, however, this would be discontinued.
Nevertheless, there is the possibility of a reverse-stigma arising towards those who accept the grant. This would be particularly problematic in the UK’s current state, as its position in light of Brexit, as well as the widespread multicultural population, could further ostracise certain groups in society, fragmenting a country already in a state of unease.
The importance of the scheme is supposed to lie in presenting equal opportunities to all of the jobless, without them having to jump through the numerous bureaucratic hoops that are currently required of those needing social benefits. The money received through UBI in Finland at the moment is less than a fifth of the country’s average private sector income, however, which raises the question of whether it is really worthwhile, or could actually be effective in the UK.
One of the major concerns regarding UBI is the potential it carries for dissuading people to seek work, due to them being guaranteed monetary benefit regardless. Nonetheless, a similar trial to that of in Finland was done in Manitoba, Canada, and revealed that the only groups of people who reduced working hours after receiving UBI were new mothers and those who had recently dropped out of school, in order to take care of their baby and resume their studies, respectively: both of which appear worthwhile.
On the surface, the introduction of UBI seems like an extremely positive idea, especially in the case of Finland, where unemployment currently stands higher than in the UK. It is important, however, to consider the numerous repercussions that may develop as a result, which could change how effective the scheme is.
This is particularly the case with the potential for stigmatisation towards those receiving UBI, which would need to be properly addressed before the UK could consider introducing it.
UBI could change millions of lives for the better, but perhaps the UK isn’t ready for it just yet.
Image: kstuttard via Pixabay