Finland's UBI experiment

[BigRedBuster]

So, if I'm unemployed right now, you start paying me. If I get a job, you keep paying me. If my job takes me in a direction where I end up making $1,000,000 per year, I still get paid.

If I never am unemployed, I never get the money.

Am I understanding that correct?

 

[knapplc]

So, if I'm unemployed right now, you start paying me. If I get a job, you keep paying me. If my job takes me in a direction where I end up making $1,000,000 per year, I still get paid.

If I never am unemployed, I never get the money.

Am I understanding that correct?

You are, but you're supposed to not just take from the system and, when you're making enough money, you're supposed to voluntarily stop taking the UBI.

Some won't do that, but I think most Finlandians will.

 

[Kiyoat Husker]

So, if I'm unemployed right now, you start paying me. If I get a job, you keep paying me. If my job takes me in a direction where I end up making $1,000,000 per year, I still get paid.

If I never am unemployed, I never get the money.

Am I understanding that correct?

No.

In Finland right now, the only reason it is a small group is because it is an experiment.

UBI would apply to everyone, regardless of status.

 

[Danny Bateman]

I don't see why UBI couldn't be scaled to reflect income and cost of living discrepancies, similar to how subsidies for healthcare currently work. As IA State pointed out, UBI here would likely have to occur with an overhaul of other forms of welfare, minimum wage, etc. It would be a huge reform to the way welfare worked in the US.

I would say you should get something regardless of income, BRB. Maybe just not as much for the person pulling down seven figures.

This would challenge beliefs all across the political spectrum. Democrats may not like infringing on tradition targeted welfare. Republicans wouldn't like huge handouts or the fact you wouldn't drug test or have work requirements.

 

[BigRedBuster]

If I was forced to vote on this right now, I would have to say...hell no.

But, I'm very open to listen and look at what evidence people has to show it is worth it.

I specifically would like to see what expenses I have right now go by the wayside if this is implemented....ie. unemployment insurance, minimum wage...etc. before I sign up for 50%+ income tax.

 

[RedDenver]

If I was forced to vote on this right now, I would have to say...hell no.

But, I'm very open to listen and look at what evidence people has to show it is worth it.

I specifically would like to see what expenses I have right now go by the wayside if this is implemented....ie. unemployment insurance, minimum wage...etc. before I sign up for 50%+ income tax.

It entirely depends on how much the UBI is and what it replaces. Here's a conservative take that would lead to lower taxes because of all the welfare state cuts.

I think that's a fantasy to think that $10k/year (ignoring healthcare) is going to replace Social Security, let alone all the other things he mentions.

 

[TGHusker]

I don't see why UBI couldn't be scaled to reflect income and cost of living discrepancies, similar to how subsidies for healthcare currently work. As IA State pointed out, UBI here would likely have to occur with an overhaul of other forms of welfare, minimum wage, etc. It would be a huge reform to the way welfare worked in the US.

I would say you should get something regardless of income, BRB. Maybe just not as much for the person pulling down seven figures.

This would challenge beliefs all across the political spectrum. Democrats may not like infringing on tradition targeted welfare. Republicans wouldn't like huge handouts or the fact you wouldn't drug test or have work requirements.

Yes but take the billions and trillions spent over time on all of the various welfare programs and channel it into one system that pays individuals a sustainable 'salary' - it could appeal to both sides of the aisle. Think of it as a social security fund pre - social security age. The Repubs should like the more stream line govt - no need for all kinds of ABC welfare agencies, and the Dems would like the socialization part of it.

 

[BigRedBuster]

It would be interesting to see if the Government starts just sending everyone in the country checks, how many of those Republicans would not cash them.

 

[Kiyoat Husker]

http://www.theonion.com/infographic/pros-and-cons-universal-basic-income-55011

A list of arguements against UBI (from The Onion.com)

• System can be exploited by “welfare queens” who live lavishly on the spoils of their $500 monthly allotment
  
• Recipients might lose sight of the value of hard work, the most noble and treasured aspect of American life
  
• Would take forever to sign all those checks
  
• Encourages entrepreneurship among dumbasses who dream of opening a f'ing cupcake truck or some other bullsh#t
  
• The long-term effects of bestowing lower class with a sense of dignity are currently unknown
  
• Leveling the playing field would be detrimental to the vast minority of Americans
  

 

[RedDenver]

Hawaii state government unanimously passes bill to evaluate UBI. From the article:

The bill has two major provisions. First, it declares that all families in Hawaii are entitled to basic financial security. "As far as I'm told, it's the first time any state has made such a pronouncement," wrote Lee. The second provision establishes a number of government offices "to analyze our state's economy and find ways to ensure all families have basic financial security, including an evaluation of different forms of a full or partial universal basic income."

The congressman thanked "redditors" in his post, as he said the site became his first resource in considering UBI, and added a Reddit-standard TL;DR at the end: "The State of Hawaii is going to begin evaluating universal basic income."

Lots of links in that article for anyone interested.

 

[84HuskerLaw]

Having heard nothing more about this 'experiment' that what is described here, I can see several major problems with such a scheme as simply magically issuing everyone a check which apparently, is the ultimate end game. Unless Finland is generating the funds for such a program from the sale of natural resources to countries, people and others outside of Finland, the most likely consequences would be:

1. The growth of massive 'national' debt and disasterous inflation.

2. The UBI payments would effectively drive down the prevailing wages for most and the devaluation of the currency.

3. The funds amount to a public subsidy of employers who will inevitably find hiring workers less and less costly as the supply of workers will increase as many will be now willing to work for much less than living wages as the government checks will enable them to do so. In the long run, any public subsidy of private sector activities creates economic distortion and inefficiency.

One need only look to the typical Walmart 'greeter' (a high percentage of which are social security recipients which effectively enable them to go to work at less than living wage levels). It is certainly possible to debate the pros and cons of subsidizing Walmart with social security but ultimately basic free market economics prevail so long as government allows it.

Massive Chinese government subsidies enable their workers to be paid a small fraction of their American counterparts (think competitors) which make goods produced with dirt cheap labor much cheaper than the competitive products. This is UNFAIR competition if not unlawful and in the long run is not good for the world economy. In the short term, Americans get to buy things at artifically low prices (Americans love to buy things cheap and in their own individual self interest it is perfectly rational). However, in the long term, entire industrial segments are driven out of business and are extremely costly to rebuild and may never be recovered.

Following such a process to its logical conclusion, one would argue we should all just hire ourselves to work or not as we please and pay ourselves a high nominal wage. We could just magically be rich over night! Of course, we all instinctively know that something like this is not economically possible and simply won't work. The market forces which are beyond the powers of civil laws to amend, just as laws of physics such as gravity are likewise not possible to change by writing a new statute. In these approaches, the currency is simply depreciated and devalued and prices would quickly rise to effectively recognize the relative worthlessness of the money being artifically created. One cannot borrow or print a society from poverty to wealth. Wealth must be produced through valuable work and innovation.

Brain surgeons tend to make a big income from their work. Therefore, we should all become brain surgeons and just perform operations on each other until we are all 'millionaires' and no longer need to work.

 

[zoogs]

Having heard nothing more about this 'experiment' that what is described here, I can see several major problems

Normally a 500-word treatise on the subject is prefaced by "hearing" more about it.

 

[RedDenver]

Having heard nothing more about this 'experiment' that what is described here, I can see several major problems with such a scheme as simply magically issuing everyone a check which apparently, is the ultimate end game. Unless Finland is generating the funds for such a program from the sale of natural resources to countries, people and others outside of Finland, the most likely consequences would be:

1. The growth of massive 'national' debt and disasterous inflation.

2. The UBI payments would effectively drive down the prevailing wages for most and the devaluation of the currency.

3. The funds amount to a public subsidy of employers who will inevitably find hiring workers less and less costly as the supply of workers will increase as many will be now willing to work for much less than living wages as the government checks will enable them to do so. In the long run, any public subsidy of private sector activities creates economic distortion and inefficiency.

1) Where do you think the UBI money goes after the citizens get it? Back into the economy. What happens when the economy thrives? More taxes are paid. There's certainly an upper limit at which the UBI is more than the taxes raised, but that's part of what the experiments are designed to determine. It's not as simple as just claiming debt and giving up. And there's no evidence for "[sic] disasterous inflation", which you seem to think happens a lot.2) Just the opposite, driving up wages and eliminating the minimum wage is one reason conservative economists support UBI. If a job offers you less than you want to work for, you can reject that offer because you have a minimum safety net. It also provides the ability for the poor to move to where the better wage jobs are located.

3) This is a variation on point #1. And while you may claim "any public subsidy of private sector activities creates economic distortion and inefficiency," that doesn't make it true. Social programs from the police to IRS to mail service to the military show that your claim isn't always true. Not to mention the dozens of social democracies around the world who have robust economies.

 

[teachercd]

It is depressing (as in, the clinical version of depression) to be out of a job. I can understand how that would weigh on a person, and become debilitating. So in general I can understand the concept of a UBI providing some emotional relief. I guess we'll see how effective that really is in improving Finland's overall quality of life.

What I don't understand is, where is that money coming from?

From people with jobs

The Personal Income Tax Rate in Finland stands at 51.60 percent. Personal Income Tax Rate in Finland averaged 52.96 percent from 1995 until 2016, reaching an all time high of 62.20 percent in 1995 and a record low of 49.00 percent in 2010.Link

This is like a wet dream for some people.

I thought they also tried nailing Finnish hockey players who were in the NHL.

 

[RedDenver]

It is depressing (as in, the clinical version of depression) to be out of a job. I can understand how that would weigh on a person, and become debilitating. So in general I can understand the concept of a UBI providing some emotional relief. I guess we'll see how effective that really is in improving Finland's overall quality of life.

What I don't understand is, where is that money coming from?

From people with jobs

The Personal Income Tax Rate in Finland stands at 51.60 percent. Personal Income Tax Rate in Finland averaged 52.96 percent from 1995 until 2016, reaching an all time high of 62.20 percent in 1995 and a record low of 49.00 percent in 2010.Link

This is like a wet dream for some people.

I thought they also tried nailing Finnish hockey players who were in the NHL.

Those income percentage numbers are somewhat misleading as they are for the highest tax rate. From that link: "The benchmark we use refers to the Top Marginal Tax Rate for individuals."

If you look at the average total tax rate (not just income tax), the US is about 31.7% and the OECD average is 35.9%. From that same link, Finland is about 43.9%.