Finland has launched a social experiment whereby 2,000 randomly selected citizens are to receive a monthly allowance of $587 (€560) each for a period of two years, according to the Los Angeles Times.
The Finnish government took this route to see how a basic monthly income for employed citizens could help reduce poverty and the social problems associated with joblessness.
This monthly salary for unemployed citizens started on Monday and it is managed by KELA, the arm of the Finnish government that administers social security benefits among others.
Although jobless citizens who already collect any social security benefits will have this new 560 euros deducted from their existing benefits, this does not affect others who do not receive any social benefits at the moment. Meanwhile, beneficiaries are free the spend the money any way they see fit and they are not required to report or fill out forms detailing how they spend the free salary.
Finland has a population of 5.5 million and about 213,000 citizens are jobless, bringing the country’s unemployment rate to 8.1% since nearly two years. Meanwhile, those who are employed in the private sector earn an average of 3,500 euros monthly.
According to Olli Kangas from KELA, the program will remove the “disincentive problem” jobless people face in the country, especially those who feel they are “losing out on something.” And to sweeten the deal, beneficiaries of the free monthly income will not lose out on the 560 euros benefit even after they secure a job within the two years experimental period.
Although unemployed persons who currently receive other forms of social benefits may decline to collect this latest benefit where they fear it will affect their first benefits, social experts say the whole aim of the exercise is to analyze how people behave to free monthly salaries in a jobless environment.
There is already a universal basic income (UBI) theory where everyone within a country receives a monthly paycheck for simply being alive, according to Business Insider. But it is yet to be determined if beneficiaries of this Finnish monthly package will get lazier with the free salary or if it will propel them to get a job.
Whatever they choose to do, it is known that the monthly help will prevent people from falling through financial cracks in their daily lives. “Some people might stay on their couches, and some might go to work,” said Marjukka Turunen of KELA’s legal benefits department. “We don’t know yet.”