“Thank goodness that this experiment is coming to an end,” the Fox News commentator Stuart Varney said recently, after the Finnish government decided to stop its trial run with universal basic income (U.B.I.) at the end of the year. “You want money, get out there and work for it, please.”
Jussi Halla-aho, the leader of the far-right Finns Party, applauded the decision, arguing that “work is the best social security.” Some center-left politicians also have been skeptical. Antti Rinne, the leader of the Social Democratic Party, said last year, “I don’t need any basic income. I have a good salary, and if I happen to lose my job, I’d have unemployment benefits.”
But the demise of the U.B.I. experiment in Finland can’t be said to mean that U.B.I. has failed here. Not only are preliminary official results not even expected until 2019, but the Finnish government’s U.B.I. pilot project never really was about U.B.I.
As we wrote last summer, Finland’s program was doomed as soon as it began in early 2017. Targeting just 2,000 randomly selected unemployed Finns to receive 560 euros a month (about $675) for only two years, it was too limited in both scale and duration.
Finland’s conservative government was, of course, an implausible champion for progressive experimentation. Soon enough, it became clear that the Center Party, which leads the ruling coalition, had no intention of properly experimenting with U.B.I., which would have required conducting a much larger and longer study, as many academics recommended. Researchers overseeing the program were instructed to test whether the unemployed could be encouraged to take up low-paid work if they didn’t lose benefits.
Even before the U.B.I. trial began, the government announced that it would concurrently reform unemployment benefits. What it calls the “activation model” kicked in at the beginning of this year: The measure withholds benefits from unemployed people who, for instance, are thought not to be searching for jobs actively enough — the opposite of a basic income program, which comes with no strings attached. The measure has been (rightly) criticized for creating more bureaucracy only to exercise stricter control over the jobless. Nearly half of the people affected by it have lost benefits as a result.
This outcome is a shame, because the Finnish government has been giving money away for decades with great success.
Many university students get a monthly €250 stipend from the state, and Finnish citizens pay no tuition fees. Low-income families are eligible for a housing allowance. Such benefits and various income redistribution measures help explain why the poverty rate and income inequality in Finland are among the lowest in the world.
For example, in 2016 the at-risk-of-poverty rate before social transfers was near 44 percent whereas the at-risk-of-poverty rate after social transfers was under 12 percent. Finland’s Gini coefficient before taxes and transfers was 0.5 in 2014, compared with 0.26 after taxes and transfers.
About 34 percent of Finns aged 15 to 74 aren’t working. The unemployed make up only a small part of this group, the majority consisting of students, the elderly, the disabled and stay-at-home moms and dads. This inactive population needs support, including money, in order to participate fully in society — a democratic right, according to the Constitution.
Government benefits, and measures transferring income or wealth generally, are a hallmark of the Nordic welfare state and enjoy robust public support in Finland. About 75 percent of the country’s population wants the state to decrease income inequality further. In the most recent comprehensive poll about U.B.I., from the fall, 51 percent of respondents said that providing a partial basic income (€560 a month) was a “good idea,” compared with just 21 percent who thought it was a bad idea.
On the other hand, the government’s so-called activation model has been extremely unpopular, and not only among the people who have suffered from it. According to a survey early this year by the national broadcaster Yle, 56 percent of respondents opposed the measure and 36 percent supported it. A major workers union organized a demonstration against it in February, in solidarity with the jobless.
Finland has an established history of very forward-looking social policy. Honoring that tradition, and the public’s support for it, means properly setting up large-scale research and trials.
Instead of ending its experiment with U.B.I., the government should reframe it and expand it. The program should be extended to a wider and more varied group, including employed people. And it should test different levels of income.
The Finnish government’s project — too limited, halfhearted, ideologically skewed — can only yield inconclusive data. To do U.B.I. right, we need to think big and try harder.
Antti Jauhiainen and Joona-Hermanni Mäkinen are co-directors of Parecon Finland, an economics think tank, and the authors of Hyvinvointivaltion vastaisku (The Welfare State Strikes Back).