Basic income is going to be tested in Finland : your thoughts?

[the.tok]

http://www.basicincome.org/news/2015/06/finland-new-government-commits-to-a-basic-income-experiment/

Recently, the idea of a basic income is being discussed in several countries in Europe.

Spain is considering an experiment, France too, Belgium is starting to talk about it

I heard that there were some experiment of this in the past and it turned out quite well, but it never made it past the experiment step.

For those unfamiliar with the concept, it is in a nutshell about giving every citizen (without any kind of condition) a basic income (in Finland, they are talking about 1 000€, about 1100$ per month).


What are your thought about it? Do you think that would be a good idea? That is a pretty big shift in our society

 

[Capita]

http://www.basicincome.org/news/2015/06/finland-new-government-commits-to-a-basic-income-experiment/

Recently, the idea of a basic income is being discussed in several countries in Europe.

Spain is considering an experiment, France too, Belgium is starting to talk about it

I heard that there were some experiment of this in the past and it turned out quite well, but it never made it past the experiment step.

For those unfamiliar with the concept, it is in a nutshell about giving every citizen (without any kind of condition) a basic income (in Finland, they are talking about 1 000€, about 1100$ per month).


What are your thought about it? Do you think that would be a good idea? That is a pretty big shift in our society

I'm almost certain that this is going to lead to a decrease in prodcution. Besides that, this can play out either way, but I'm going to predict a capital flight will occur causing Finland to worsen its debt.

 

[the.tok]

I'm almost certain that this is going to lead to a decrease in prodcution. Besides that, this can play out either way, but I'm going to predict a capital flight will occur causing Finland to worsen its debt.

You mean in global production in the country, or in production per hour worked? I guess the latter could only increase, which would more attract than detract capital, which doesn't care about global production no?

I'm not even convinced the production would decrease. We're talking about 1000€, not enough to stop working.

I heard that it already exists in Alaska in some ways : has anyone some first-hand info on this? I can only find very vague info

 

[adlp]

this type of government policy could possibly work out well for finland actually.

the main reasons are related to its relatively to its small size and a small amount of immigration. policies like this would never work in the US.

spain is in a lot of trouble right now because their unemployment rate is scary high. there's currently a new political party called Podemos that is gaining popularity trying to combat unemployment but idk how their elections go.

it does not work in france and they will be dumb to try it when their economy is already dwindling because they have a very high tax rate against the super rich, to the point where they just relocate and take their production with them away from france

 

[Capita]

You mean in global production in the country, or in production per hour worked? I guess the latter could only increase, which would more attract than detract capital, which doesn't care about global production no?

I'm not even convinced the production would decrease. We're talking about 1000€, not enough to stop working.

I heard that it already exists in Alaska in some ways : has anyone some first-hand info on this? I can only find very vague info

That most certainly isn't enough to live off of, at least for one individual. However, it reduces the incentive to increase your work conditions. If you were working 50 hour work weeks while receiving 50,000 Euros a year, but you were suddenly given a 1000 Euro a month basic income, it would give incentives to a lot of individuals to reduce the amount they may work, as they would be able to maintain their status while producing less. While wages could theoretically remain unchanged (not very likely), the reduction in productivity would serve a problem since wages are the price of labor.

That basic income in Alaska is based solely off of oil revenues, however the cost of living isn't the best in Alaska.

the main reasons are related to its relatively to its small size and a small amount of immigration. policies like this would never work in the US.

You're right. Only countries with a very small amount of immigrants could pull this off. You would need some immigrants to sustain the working class population, but a huge influx would only offset the system.

 

[the.tok]

If you were working 50 hour work weeks while receiving 50,000 Euros a year, but you were suddenly given a 1000 Euro a month basic income, it would give incentives to a lot of individuals to reduce the amount they may work, as they would be able to maintain their status while producing less. While wages could theoretically remain unchanged (not very likely), the reduction in productivity would serve a problem since wages are the price of labor.

I genuinely do not understand what you say about a decrease in productivity per hour.
The wages are per hour
The more you work in a week, the less productive you are per hour (the optimal is around 30h or 32h/week IIRC, but let's take 30 for the example)

Let's say that a company used to have two employees working 45h/week, paying them 10€/h, thus 450€/week. The total cost is 900€/week plus the additional cost for overtime (let's say +25% for the time over 35) = 950€ for a work of 90h, of which 30 are under optimal productivity

The two employees decide to work 30h/week, so the company has to hire a third one. The total cost is now 900€/week, no need to pay for overtime but the productivity has risen since the whole 90h are at optimal productivity. So the company is actually getting more bang for its buck no? The labour cost would decrease per hour (less overtime) while the performance rises. Reducing the incentive to work too much is good in my book from a public health pow too.


The effect that I see as a benefit is increase the gap between minimum wage and welfare.

Let's say in current system, minimum wage is around 1 000€, welfare earns you around 700€.
In the new system, if minimum wage is unchanged, that would make 2 000€ versus 1 000€. More motivation.

The other benefit is it would be much easier to start your own business because you would fear less to not succeed.

 

[greatbernard]

The nordic countries have low immigration laws and mainly consist of middle class families which have maintained a degree of modest wealth for generations.

It could probably work in Finland, but it would be a disaster in a country with an open immigration system like the U.S.

 

[FalKoopa]

I don't see it working in countries with large populations. Europe is probably the only place where this is feasible, with its high per capita income and lower population.

Even if you don't take immigration into account, such a policy is flat out unaffordable for most governments.

Switzerland did vote on a similar law a few days ago, and it was overwhelmingly rejected.
http://www.bbc.com/news/world-europe-36454060