‘Conditional’ basic income in Finland

31st May 2016, Comments 0 comments

Swiss voters are due to decide on a people’s initiative to introduce an unconditional basic income on June 5. Finland has already decided.

Two countries, two paths – and some interesting parallels. In Switzerland, citizens have until June 5 to make up their minds whether the principle of an unconditional basic income should be anchored in the constitution. Opinion polls suggest a clear majority will vote against it.

In Finland, by contrast, where a citizens' initiative failed to collect enough signatures a few years ago, the idea of a basic income will become reality in the years ahead. A clear majority of the centre-right dominated parliament decided in favour of it.

The similarities are indeed interesting.

Both Switzerland and Finland are wealthy welfare states. In both countries, some branches suffer labour shortages, while at the same time, to varying degrees, a proportion of the employable population is outside the labour market.

In both European states, the costs of the social insurance system are threatening to spiral out of control because of demographics – the ageing of the population.

People’s initiatives in Finland

Parallels can also be drawn in the development of citizens’ rights, under which citizens can participate directly in the country’s politics.

Whereas in Switzerland, the people’s initiative celebrates its 125th anniversary this year, Finland’s roughly five million citizens have had the right to initiate national legislation for just five years.

However, the Finnish citizens’ initiative law isn’t based on the compulsory Swiss model, but on the European example of the so-called agenda motion. Whoever manages to collect at least 50,000 signatures within six months in Finland can trigger a law-making process in the national parliament – the Eduskunta in Helsinki.

In contrast with Switzerland, where even today signatures can only be collected manually on paper, initiators in Finland have access to an electronic platform.

Whoever wants to sign uses electronic banking access.

The most successful of more than 500 people’s initiatives launched in Finland brought together more than 160,000 signatures in just a few days in the summer of 2013 in favour of same-sex marriage. Parliament took up the initiative a year later - and approved it in February this year. It is due to come into force next March.

An initiative from the Finnish population to introduce a basic income was far less successful: In 2013, just 1,000 signatures were collected, while a similar initiative at the European level notched up around 50,000 signatures.

Conditional basic income

Nevertheless, the businessman Juha Sipilä, then a member of the Finnish parliament, picked up the baton. After his central party won elections in April 2015, Sipilä, as the newly elected prime minister, suggested that Finland should conduct an experiment with basic income. This is now scheduled to happen in 2017.

Not only is the direct-democratic route to a basic income rather different in Finland than it is in Switzerland – so is the proposed model. The basic income planned in Finland is “conditional” rather than “unconditional.”

Concretely, anyone who now receives more in unemployment or social benefits than they would earn if they had taken a job in their profession – and therefore has little incentive to work, for example as a carer in an old people’s home – will receive the equivalent of about CHF800 ($808) per month from the state.

Support from centre-right

Finland suffers from a shortage of qualified labour in certain branches, especially in the public sector. Campaigns abroad, such as repeated attempts to attract carers from the Philippines, have not been able to solve the problem.

Now with the introduction of the basic income, initially limited to two years, the hope is that this Gordian knot will be broken and a persistently high unemployment rate of about 10% will be reduced.

Finally, it is interesting to note the differing political support for basic income: in Switzerland, it is primarily the Green Party and, to some extent the Social Democrats, that support the proposal. In Finland, on the other hand, it is the parties of the centre-right that favour the idea.

The proposed models of basic income are also different. In Switzerland, a sweeping reform of the welfare state by means of a wage for all citizens is under discussion.

In Finland, a significantly less ambitious model that should lead to a step-by-step reform of the welfare state is about to be implemented.


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