The idea is to relieve long-term unemployment at a time when jobs are increasingly being automated or carried out in cheaper countries due to technological developments. In Finland employment stands at almost 9% with long-term unemployment is increasing forcing the government to rethink its approach to the problem.
So the payment of the universal basic income (UBI) should help people to adjust to the insecurity of the current labour market with its part-time jobs and zero-hour contracts. It will also mean that all the complicated rules about welfare or unemployment benefits can be cut.
For example an unemployed worker in Finland might get €667 a month after tax but any money earned would be deducted from that. Now that person will received €560 a month with no strings attached and no red tape.
The government also hopes that more people will become self-employed. A senior official said “People are afraid to take on temporary jobs or start small businesses because they would lose their benefits; they prefer safe but low income to the risk of failing”.
If the experiment is a success the UBI would be available to every employable Finn although better paid ones would lose the benefit through taxation. This would cost €10-15 billion and some critics doubt it would be possible without increasing the already high rates of tax.
This is a test of human nature. Will people want to work and strive or just sit back and take the money. Theory X or theory Y in management speak.
Other countries are also considering the idea e.g. the Netherlands, France, Canada, India, and the state of California. Switzerland decided against it last year after a referendum in which voters were told it would double welfare spending.
Here in the UK trials are also being planned for Fife and Glasgow in Scotland, but not in England where the Citizens Income Trust and the Green Party support the idea. The Royal Society of Arts has also pitched in suggested we would need a basic income of £,3692 a year (2013)
Professor Guy Standing, from the School of Oriental and African Studies, recently presented the idea to the World Economic Forum in Davos. He talked about the “precariat” – people who live a precarious existence in temporary jobs, zero-hour contracts, and shuffling between employment agencies without any assurance of state benefits.
And if futurist are right and up to 50% of jobs could be automated over the next two decades then UBI could be the answer, certainly Elon Musk, the technology entrepreneur behind Tesla cars thinks so.
The idea was first proposed by Karl Marx’s son-in-law Paul Lafargue over a hundred years ago. He proposed that as technological advances would put humans out of work so everyone had a right to be lazy and should be paid basic income whether or not they had a job.
As mentioned above France is one of the countries considering adopting UBI and it is a central plank of the Socialist Worker’s Party. They foresee automation replacing 10% of all jobs in France over the next 8 years and the end of France’s jobs-for-life culture. So everyone should receive €9,000 a year (watered down in the face of criticism to people aged 18-25 initially with others included by 2022).
Could it happen? Should it happen?
Will it only encourage those who don’t want to work to not bother looking for work (and there are probably 15-20% of the population who fall into that category)?