Finland is planning a universal basic income system that will pay its citizens €800, about $876, per month.
The national basic income being planned by the Finnish government will not be implemented soon, as a final proposal could take until November of next year to be presented. However, the country is getting closer to the initiative that will pay its 5.4 million citizens, including babies up to teenagers, the amount.
The concept has been the subject of debate for economists and academicians alike, and Finland will be the first major country in the world that will be implementing the idea of a universal basic income, which was first thought up way back in the 1960s by the economist Milton Friedman.
The tax-free basic income, however, does not come without a catch. The €800 per month that Finland's citizens will receive will be replacing all the existing welfare benefits of the country. The basic income will also be unconditional though, which means that it will be provided to all of the country's citizens regardless of the income that each person generates.
A pilot program will precede the full implementation of the system, with the citizens receiving €550 per month while some welfare benefits remain.
The basic income is not high enough to reach minimum wage levels. However, it would be enough to get by, which would be very important for struggling families as Finland's economy continues to try to climb out of a three-year recession.
Around 10 percent of the population of Finland is unemployed, with the growth of the country's GDP near zero. And even once the country is able to make its way out of its recession, Finland's recovery will be very slow.
The universal basic income that Finland is proposing, however, could eliminate one of the major concerns of welfare benefits, namely the massive tax and benefit withdrawal rate which makes poor people not want to increase their income. The bargaining power of workers could also increase, as they would be able to live without the need to work. In turn, basic income could reduce inequality.
Of course, all of these are conceptual in nature as the idea has never been implemented yet, making Finland's decision to push forward with universal basic income the real-world test that the idea needs.
It remains to be seen whether Finland will be able to support the system though, as the plan would cost €52 billion annually, which is an amount higher than the expected Finnish government revenue for 2016 of only €49.1 billion.
