Finland Launches Basic Income - Should Canada Follow Suit? | Refresh Financial

Finland Launches Basic Income – Should Canada Follow Suit?

Finland

Finland has launched an experimental program to get a real idea of what the effects of Basic Income might be. For 2 years, the country is handing out tax-free money to a select group to see what happens.

The experiment in Finland is limited to 2000 people, who will all receive approximately CA$785 per month. They are between the ages of 25 to 58 and currently on unemployment benefits. This new monthly payment will replace the participants' unemployment benefit, and will still be provided no matter what. If the person receiving the money ends up getting a job, they will still receive the money every month.

The reason why Finland has launched this experiment is that they are hoping to reduce unemployment. With unemployment benefits, if people find work, their benefits are reduced. They are hoping people in the experiment will be motivated to find work and increase their income, as there will be no loss to their basic income if they do. Their income can only increase. Finland is also hoping that participants will be more likely to take on short-term work or self-employment, as having their basic income will give take away the money stress that comes with that kind of work.

Critics of Basic Income complain that it might end up making people lazy. By always receiving this amount every month, they say that people won't want to try and get a job as well.

But this is not necessarily the case. Some of us enjoy our work, or are driven by self-improvement. And then there are those of us who couldn’t imagine spending all day at home. The biggest motivator for most of us to find a job, though, is that a Basic Income would not be enough to live off. At least not the amount Finland has begun with (approximately CA$785). There is no way to really tell how we would respond to a Basic Income for everyone without testing it, though, and that’s what Finland has set out to do.

This step, if a success, could lead to other countries, such as Canada, following suit. There are many ways that Canada could benefit from a program like this, with ending poverty being the biggest plus, followed by reducing unemployment. The other upsides to replacing unemployment benefits with a system like this, is that the government would no longer have to enforce the time and resource-gobbling unemployment benefits program, where participants have to constantly report in. It could also serve to bring about an equality in society never really seen before, with everyone being given a set amount to help them get by, no matter who they are. And people who have spending power, put money back into the economy.

The downside, of course, would be the cost. This would be reduced by not having to pay unemployment benefits, and could potentially also be offset by premiums in wages, like EI is. It will also likely take some of our tax money, as well. For this reason, similar plans have been rejected recently in Switzerland and the UK.

We’d like to know what you think about a Basic Income and how it might look in Canada. Are you for it? Against it? Why or why not? Let us know in the comments!

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