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robertogreco : manitoba   3

Finland plans to pay everyone in the country $876 a month
"Imagine this: as you're worried about how to pay bills and make your rent, you get a check from the government for $876. Every month.

That's what Finland is doing. The Nordic nation is getting closer this month to finalizing a solution to poverty: paying each of its 5.4 million people $876 tax-free a month — and in return, it will do away with welfare benefits, unemployment lines, and the other bureaucracy of its extensive social safety net.

The concept, called basic income, has been a popular source of debate among academics and economists for decades, though Finland would be the first nation in the European Union — and the first major nation anywhere — to actually implement the idea on a universal basis. The basic income was popularized by the economist Milton Friedman in the 1960s as a "negative income tax."

The Finnish proposal, which is still being drafted by the country's social welfare institution, Kela, would reportedly give each Finn 550 euros a month to start.

As a result, Finland would scrap nearly all of its other benefits programs. In Finland, as in the U.S., people get welfare benefits according to their incomes.

In contrast, the universal basic income would go to every citizen regardless of how much money he or she makes — rich or poor. the universal basic income would go to every citizen regardless of how much money he or she makes — rich or poor.

In Finland, the push for a basic income comes as the country's economy is struggling. About 10% of Finland's population is unemployed as Finland tries to claw its way out of a three-year recession.

The most recent economic forecast from Finland's finance ministry, for autumn 2015, begins flatly with grim news and little hope for a better future: "The Finnish economy is in a serious situation. GDP growth is close to zero. Unemployment is rising and unemployment spells are becoming longer. Even once the recession is over, growth will be painfully slow."

As the economic picture gets darker, more Finns support the idea of a monthly check to every Finn, struggling or not. Nearly 70% of Finland's population is in favor of a basic income, according to a September poll. In April, voters elected the country's Centre party, which campaigned in favor of a basic income, to a controlling position in the government. The basic income is, however, popular among followers of nearly all the nation's parties.

But the scheme has its drawbacks. Finland is strapped for cash, with a major push for austerity — or cutting government costs — underway.

The universal basic income would require the equivalent of nearly the entirety of Finland's revenue The universal basic income would require the equivalent of nearly the entirety of Finland's revenue, and then some, which would imply higher taxes down the line for the nation's already struggling households.

Finland's 800-euro-a-month plan, distributed among every single person in the country including babies and teenagers, would cost 52 billion euros a year, and 47 billion euros if you count only adults.

Those are enormous numbers and a tough haul when the entire government's revenue for 2016 is expected to be only around 49.1 billion euros.

Finland is already highly indebted, with the country owing the equivalent of more than 58% of all the goods and services it produces in a year, and its central bank has warned that might double.

Finland's economic situation is set to get worse because of major demographic shifts. Finland's population is rapidly aging — faster than any other country in the EU. A fast-aging population is a major problem for several reasons. It means a country's workforce will shrink, as people retire from work - which in turn means the population will be less productive. Another reason: the country's revenues will fall and its economy will stagnate over time because there are fewer people working and paying income taxes, which make up the majority of a country's revenues.

Still, the idea has recently been picking up speed on a local level for years, since the big global financial crisis of 2008 and the subsequent recessions and economic struggles in major countries. In Switzerland, a years-long push for basic income grew steadily in popularity until the nation's parliament rejected it in October. The Dutch city of Utrecht is in the process of a pilot project on basic income, and seven other cities in the country have announced their intention to explore the idea, which has been discussed in the Netherlands since the 1970s.

Manitoba, in Canada, tried the idea in the late 1970s, creating, briefly, "the town with no poverty." A subsequent study by Duke University researchers found that during its "MINCOME" experiment, Manitobans had lower rates of hospitalization, particularly for mental health problems and accidents.

With income inequality a growing concern for nearly all countries, many have experimented with basic incomes. A 2008 academic study found that simple cash transfers were effective and cheap, keeping down administrative costs; a government grant of $100 in Colombia, for instance, cost only 70 cents.

In theory, the concept of the basic income is politically appealing because it satisfies people who are on the left, who are concerned with strengthening social safety nets, as well as people who are conservative and opposed to large bureaucracies. A single check cut to each citizen seems to appeal to both sides.

Different countries respond differently, however. In Switzerland, the referendum for a universal basic income actually drew ire from both sides and was roundly struck down in a vote of 149-14, as conservatives feared a monthly check would increase both laziness and a wave of unsustainable immigration, while those on the left objected to wiping out the welfare system."
finland  universalbasicincome  2015  economics  socialsafetynet  poverty  mincome  manitoba  ubi 
december 2015 by robertogreco
The Town Where Everyone Got Free Money | Motherboard
"The motto of Dauphin, Manitoba, a small farming town in the middle of Canada, is “everything you deserve.” What a citizen deserves, and what effects those deserts have, was a question at the heart of a 40-year-old experiment that has lately become a focal point in a debate over social welfare that's raging from Switzerland to Silicon Valley.

Between 1974 and 1979, the Canadian government tested the idea of a basic income guarantee (BIG) across an entire town, giving people enough money to survive in a way that no other place in North America has before or since. For those four years—until the project was cancelled and its findings packed away—the town's poorest residents were given monthly checks that supplemented what modest earnings they had and rewarded them for working more. And for that time, it seemed that the effects of poverty began to melt away. Doctor and hospital visits declined, mental health appeared to improve, and more teenagers completed high school.

“Do we have to behave in particular ways to justify compassion and support?” Evelyn Forget, a Canadian social scientist who unearthed ​some of the findings of the Dauphin experiment, asked me rhetorically when I reached her by phone. “Or is simply human dignity enough?”

Critics of basic income guarantees have insisted that giving the poor money would disincentivize them to work, and point to studies that show ​a drop in peoples' willingness to work under pilot programs. But in Dauphin—thought to be the largest such experiment conducted in North America—the experimenters found that the primary breadwinner in the families who received stipends were in fact not less motivated to work than before. Though there was some reduction in work effort from mothers of young children and teenagers still in high school—mothers wanted to stay at home longer with their newborns and teenagers weren’t under as much pressure to support their families—the reduction was not anywhere close to disastrous, as skeptics had predicted.

“People work hard and it’s still not enough,” Doreen Henderson, who is now 70 and was a participant in the experiment, told the ​Wi​nnipeg Free Pres​s​ in 2009. Her husband Hugh, now 73, worked as a janitor while she stayed at home with their two kids. Together they raised chickens and grew a lot of their own food. “They should have kept it,” she said of the minimum income program. “It made a real difference.”

The recovered data from “Mincome,” as the Dauphin experiment was known, has given more impetus to a growing call for some sort of guaranteed income. This year, the Swis​s Parliament will vote on whether to extend a monthly stipend to all residents, and the Indian government has already begun replacing aid programs with direct cash transfers. Former US Labor Secretary Robert Reich has called a BIG “alm​ost inevitable.” In the US, Canada, and much of Western Europe, where the conversation around radically adapting social security remains mostly hypothetical, the lessons of Dauphin might be especially relevant in helping these ideas materialize sooner rather than later."

"Advocates have argued that a single coordinated program providing a base income is more efficient than the current panoply of welfare and social security programs and the bureaucracy required to maintain them (in the U.S. there are currently 79 means-tested social welfare programs, not including Medicare or Medicaid). “Existing social assistance programs were riddled with overlaps and gaps that allowed some families to qualify under two or more programs while others fell between programs,” says Forget.

When Mincome was first conceived, in the early '70s heyday of social welfare reform, some thought the experiment in Dauphin could be the prelude to a program that could be introduced across Canada. South of the border, there was widespread support for minimum income as well. A 1969 Harris poll for Life Magazine found that 79 percent of respondents supported a federal program President Nixon had proposed called the Family Assi​stance Plan that guaranteed a family of four an annual income of $1,600, or about $10,000 today. Nixon’s FAP plan (it wasn't guaranteed income, he insisted, but it was) made it through the House before it was killed in the Senate, voted down by Democrats. Still, there remained a sense of experimentation in the air. Four minimum income trials occurred in the US between 1968 and 1975, which appeared to show that the work hours of basic income recipients fell more sharply than expected.

But these experiments were done with small sample sizes; the experiment in Dauphin was unusual in that in encompassed a whole town. Forget, now a community health professor at the University of Manitoba who studies a range of social welfare programs, saw in the Mincome data a rare chance to examine the effects of BIG on a wider scale.

An undergrad in Toronto at the time the experiment was first being conducted, she remembers hearing about it in class. “My professor would tell us about this wonderful and important experiment taking place ‘out west’ that would revolutionize the way we delivered social programs.”

Years later, when she ended up “out west” herself, she began piecing together what information she could find about Dauphin. After a five-year struggle, Forget secured access to the experiment's data—all 1,800 cubic feet of it—which had been all but lost inside a warehouse belonging to the provincial government archives in Winnipeg. Since 2005, she’s been thoroughly analyzing it, carefully comparing surveys of Dauphin residents with those collected in neighboring towns at the time.

Forget's analysis of the data reveals that providing minimum income can have a substantial positive impact on a community beyond reducing poverty alone. “Participant contacts with physicians declined, especially for mental health, and more adolescents continued into grade 12,” she concludes in her paper, “The Town with No ​Poverty,” published in Canadian Public Policy in 2011. Forget also documented an 8.5 percent reduction in the hospitalization rate for participants as well, suggesting a minimum income could save health care costs. (Her research was unable to substantiate claims from US researchers that showed increases in fertility rates, improved neonatal outcomes or increased family dissolution rates for recipients of guaranteed incomes.)"

"When Forget looks at politics and culture and the economy now, she sees forces converging to create a more hospitable climate for minimum income experiments on a grander scale than before.

“This is an interesting time,” she said. “A lot of our social services were based on the notion that there are a lot of 40 hour-per-week jobs out there, full-time jobs, and it was just a matter of connecting people to those jobs and everything will be fine. Of course, one of the things we know is that’s certainly not the case, particularly for young people who often find themselves working in precarious jobs, working in contracts for long periods of time without the benefits and long-term support that those of us who have been around longer take for granted.”

In the Canadian context, at least, she said, “I’m optimistic enough to believe that at some point we are going to end up with a guaranteed income.”"
2015  manitoba  universalbasicincome  wellbeing  poverty  economics  dauphin  1970s  labor  income  mincome  switzerland  health  healthcare  education  mentalilliness  thomaspaine  martinlutherkinkjr  miltonfriedman  libertarianism  socialwelfare  motivation  via:anne  jamesmanzi  evelynforget  canada  ubi 
february 2015 by robertogreco

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