Finland to pay all its citizens 800 euros a month to fight unemployment

[Kramodlog]

http://qz.com/566702/finland-plans-to-give-every-citizen-a-basic-income-of-800-euros-a-month/

The Finnish government is currently drawing up plans to introduce a national basic income. A final proposal won’t be presented until November 2016, but if all goes to schedule, Finland will scrap all existing benefits and instead hand out €800 ($870) per month—to everyone. [...]
It may sound counterintuitive, but the proposal is meant to tackle unemployment. Finland’s unemployment rate is at a 15-year high, at 9.53% and a basic income would allow people to take on low-paying jobs without personal cost. At the moment, a temporary job results in lower welfare benefits, which can lead to an overall drop in income.

Very interesting, but the plan is not without potential problems.

But those who currently receive housing support or disability benefits could conceivably end up with less under national basic income, since the plan calls for scrapping existing benefits. And as national basic income would only give a monthly allowance to adults, a single mother of three could struggle to support herself compared to, for example, a neighbor with the same government support but no children and a part-time job.

 

[delericho]

Huh. It really is the country where I quite want to be.

 

[delericho]

For a more serious answer: something like that is probably absolutely essential in the future, but it's also probably unaffordable. I don't have a solution to that problem.

The reason it's going to become increasingly important is exactly as they say: between outsourcing and automation, an awful lot of jobs are just going to disappear in the next little while. And people still have to eat, which means the money has to come from somewhere.

The reason it's probably unaffordable is that it will mean higher taxes both for those people who do still remain in work and also for businesses. Both of whom are likely to respond by moving elsewhere.

 

[Jan van Leyden]

For a more serious answer: something like that is probably absolutely essential in the future, but it's also probably unaffordable. I don't have a solution to that problem.

The reason it's going to become increasingly important is exactly as they say: between outsourcing and automation, an awful lot of jobs are just going to disappear in the next little while. And people still have to eat, which means the money has to come from somewhere.

The reason it's probably unaffordable is that it will mean higher taxes both for those people who do still remain in work and also for businesses. Both of whom are likely to respond by moving elsewhere.

Depends. When stopping all manners of welfare plans and subventions, folding all into the National Basic Income, you remove the hight costs incurred by managing and administering these programs.

Companies would be able to pay their employees less than now without these employees receiving less money.

A lot of problems notwithstanding, the main hurdle would probably changing the idea that only a working citizen is a good citizen.

 

[Kramodlog]

I'm still not sure why people who make above a certain amount (say 100,000), should receive that money.

I'm also wondering if this isn't way to subsidize the low paying jobs of some compagnies. Instead of having Wal-Mart or McD pay their employees a decent amount of money, society does it for them.

 

[delericho]

Depends. When stopping all manners of welfare plans and subventions, folding all into the National Basic Income, you remove the hight costs incurred by managing and administering these programs.

That works today. In a decade, with the population having grown and the cost of living gone up, it's less true.

Companies would be able to pay their employees less than now without these employees receiving less money.

The problem with that is that now those employees have the option to just walk away, and still have enough money to live. That means that employers will need to compensate them for the opportunity cost of using that time for more enjoyable exploits, which will apply an upward pressure on wages.

 

[delericho]

I'm still not sure why people who make above a certain amount (say 100,000), should receive that money.

Because it's cheaper to pay a handful of rich people that money than it is to run a bureaucracy to check whether they should get it or not.

I'm also wondering if this isn't way to subsidize the low paying jobs of some compagnies. Instead of having Wal-Mart or McD pay their employees a decent amount of money, society does it for them.

There's some truth in that. But those jobs are going away anyway. There's virtually nothing in a McDonald's kitchen that can't be automated - it's just a matter of cost, and the cost of labour goes up every year while the cost of automation comes down. As for WalMart, those self-scan checkouts are making those jobs increasingly redundant.

 

[Kramodlog]

Because it's cheaper to pay a handful of rich people that money than it is to run a bureaucracy to check whether they should get it or not.

I guess so. By principale it bothers me.

There's some truth in that. But those jobs are going away anyway. There's virtually nothing in a McDonald's kitchen that can't be automated - it's just a matter of cost, and the cost of labour goes up every year while the cost of automation comes down. As for WalMart, those self-scan checkouts are making those jobs increasingly redundant.

As much as I do think automatization is going to be a big thing, especially with an aging population and an ever growing resistance to immigration, there will still be employees to oversee the machines. Here, in groceries stores you have one clerk for four self-scan checkouts. I still find it problematic that these jobs need to be subsidized instead of the employer giving a decent wage. Seems like a variant of "public risks, private profit".

 

[Janx]

So how far does a Euro go? If it was a buck, that doesn't even pay my mortgage (and I have a cheaper house in TX).

I imagine it's a pretty low level of living. And the issue somebody pointed out about folks with more mouths to feed. Unless every human gets 800 a piece.

I can see the argument for rich people getting paid, they paid their taxes too (and in fact are paying for everybody else).

There's got to be an administrative break-even point where cutting checks off past a certain point can be computed efficiently enough vs. the greater tax expense of paying out even more money to everybody. Cutting off everybody who has a decent job would shave off a goodly expense of raw money.

There's also the factor that just about every employer is going to see this as $800 they can shave off the payroll, which in turn lowers that employees tax contribution which is where that $800 ultimately comes from...

It's a bold idea, but automating tax records/collection to active employment (why am I filing taxes when my employer is submitting them) means that the computer knows if you need a check, so only hand out checks to people who need them.

This would reduce the total headcount times $800 to be paying out, which has to be a greater savings vs the people/tech it takes to do that. Imagine that Finland only has 1000 people. Is it better to pay $800,000 every month for a check to everyone, or to hit the 50% or so that actually need it for half that amount. plug in Finland's actual population, and find a percentage that represents the lower portion of the income bracket, and that'll likely prove it.

 

[delericho]

As much as I do think automatization is going to be a big thing, especially with an aging population and an ever growing resistance to immigration, there will still be employees to oversee the machines.

True. But that will leave a tiny number of jobs for a few skilled professionals. Those guys will still be paid a decent amount. (Indeed, the guys who maintain McDonalds' kitchen equipment are currently paid a decent amount, because that's a skilled job. But they have, and will have, one or two maintenance guys for half a dozen stores; they'll be getting rid of the dozen or so people you actually see working the counters and the kitchen.)

Assuming, of course, they don't replace the maintenance guy with a maintenance droid, or (more likely) just swap out defective machines with new ones.

Here, in groceries stores you have one clerk for four self-scan checkouts.

Yep, one clerk for four checkouts, where previously there would have been one at each.

And that's assuming Walmart don't push people to ordering their groceries online, then have the orders delivered from a giant Amazon-style warehouse (staffed by machines) in their Google-style self-driving delivery trucks.