Is a guaranteed income the answer an uncertain future?

Finland wants to see if giving free money to unemployed citizens will better incentivise their transition to the labour market. But while the idea has promise to address a future with fewer jobs, the idea has few proponents in Denmark

No job, no problem – at least, not if you’re one of 2,000 randomly-picked unemployed Finns. Over the next two years, the Finnish government will hand them the equivalent of 4,000 kroner per month with no strings attached. If they find a job, the money is still theirs.

The project is managed by Kela, Finland’s Social Insurance Institution, in order to discover whether a basic wage motivates people on unemployment benefits to take the risk to find a low paying job instead.

“In the current system, with many strictly income-tested benefits, people may end up in situations where work does not pay enough, making them reluctant to get back to the job market with short-term or low-income jobs,” Professor Olli Kangas, head of Kela’s research department, told Al Jazeera.

The concept of a guaranteed state-financed income is actually not so modern. In the seventh century the Muslim caliph and father-in-law to the prophet Muhammad’s, Abu Bakr, introduced a minimum income; Napoleon Bonaparte claimed that every man was entitled to a “share of the Earth’s produce”; libertarian economist Milton Friedman advocated for a version of it, and Martin Luther King claimed it was the “most effective” way to fight poverty.

Each gave a different reason for offering a basic income, from producing a more effective state to creating a fairer society. Modern economists and thinkers from across the political spectrum have also identified benefits with a basic income. Last October, Branko Milanovic, a Professor of Economics at the Stone Center on Socio-Economic Inequality at University of New York, argued that a basic income could be one of the ways to combat the worrying trend of rising inequality.

Not in Denmark
But while Finland starts its trial, the idea has yet to garner much support in Denmark. Torsten Schack Pedersen, employment spokesperson for the government coalition partner Liberal Party (Venstre) says the very notion violates fundamental Danish principles.

“We believe that those that can work should work. Our constitution maintains this point and I don’t believe that the state should occupy that role,” he says, adding that a better strategy for getting people into work is to increase the financial incentive.

“As far as I know, we still offer higher unemployment benefits than our neighbouring countries, including Finland. We believe that people have a personal responsibility to get bread on the table, and if they are unable to do so than we as a society have safety net in place to help those people,” Pedersen said.

“It’s a matter of principle and if we go this way, then we are forcing a major change to our values.”

Kasper Fogh, policy director at the left-leaning think tank Cevea, shares the criticism and argues the idea is utopian and absurd.

“I understand that the discussion is taking place, but I can’t really see the argument for it,” he said, adding that it would be preferable to invest in strengthening the traditional welfare system, and increase investment in education.

One argument in support of a basic income is that it would provide an income to those whose jobs are expected to be replaced by machines and computers in the near future.

A 2013 study from Oxford University estimated that 47 percent of jobs in the US will be lost to technological innovation in the next 10 to 20 years. In the less developed world this risk is even higher, with the World Bank predicting that over 60 percent of jobs will disappear from these countries.

In response to these predictions, futurist and Tesla founder Elon Musk proposed implementing a guaranteed basic income for every man, woman and child on the planet.

“People will have time to do other things, more complex things, more interesting things. Certainly more leisure time,” he told CNBC last November.

But Fogh and Pedersen remain united in criticism on this argument too.

“This is the same discussion we had following the invention of the steam engine,” says Pedersen.

“People were worried as traditional jobs were lost, but in the end it turned out that the new technology actually created more jobs, and I can’t see it being any different this time around.” 

Fogh adds that a better way to respond to the loss of jobs to technology is to invest in an educational system that can retrain and educate the workforce.

“To start with, the industrial revolution created inequality and a poor standard of living, but that ended up being solved,” he says.

“A lot of jobs are now being created in the service industry. And just a few years ago nobody was interested in organic produce, but now that is a large, growing market.”

He points out that unemployment in Denmark is at its lowest in over a decade, so the challenge is rather to ensure that new jobs are properly paid and that the rich pay their fair share.

“I believe ideas, such as the basic income, are propagated by economists who have a very poor understanding of people. They see people as producers, but I think that true joy is having a good job – I don’t believe in doing nothing,” he said.

“To me this is a societal structure that sounds romantic in a very naive way and I don’t think there is much support for it in Denmark.”

The only champion
The one Danish party that is interested in trialing a basic income is the Alternative (Alternativet), which sees the need to try new solutions to old problems, such as unemployment.

“We don’t claim that it is necessarily the way to go, but we need to be open to new ideas,” says economy and employment spokesperson Josephine Fock, adding that she is following the different basic income trials around the world, including in Finland.

Fock argues that the current benefits system can be harmful, as it can dehumanise recipients and keep them dependent on government assistance. Monitoring recipients of unemployment benefits also requires an enormous amount of resources, while also demotivating the person under surveillance.

“The current system forces you to live up to a multitude of requirements. If people are allowed to prioritise in the way they please, they will be better prepared to take care of themselves and find employment.”

Fock also argues that a more active approach is needed to tackle the 800,000 jobs that are expected to be lost in Denmark to technology.

“We stand on the precipice of a revolution of technology and artificial intelligence, which provides us with amazing opportunities – if we structure our society in a way that can take advantage of it.” M


By Elias Thorsson

Managing editor. @Eliasthorsson

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