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.
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