The concept of a “basic income” has become increasingly popular in left-wing political circles as a way to alleviate poverty. Described briefly, a “basic income” program would involve the government cutting every citizen a check for a predetermined amount every year (presumably at some level that keeps everyone above the poverty line).
There are some conservative economists that have argued for variants of a basic income, such as Milton Friedman and his “negative income tax” for low earners, but he simultaneously called for alongside the abolition of all other welfare programs.
Any government program always sounds better on paper than in reality, where human nature takes hold. Think about it; if the government cuts everyone a check (including those in government), isn’t everyone incentivized to vote for politicians that would increase the annual basic income distributed? And in that case, people would work less and less as their government income increases, which would mean fewer taxes going to the government to fund the basic income in the first place. The system would collapse in on itself.
But don’t just take my speculation for it, a new study on a basic income out of Finland confirms as much.
According to Bloomberg News, “Before the experiment was approved by the government in 2016, officials talked of paying 800 euros ($974) a month in unconditional income to a test group of working-age citizens. But by the time the program began early last year, the amount was whittled down to 560 euros. Finland is not promising to release any results of the experiment, which involves 2,000 people, until the end of 2019 or even the beginning of 2020. But it was clear from the start that a basic income, even such a low one, is an extremely expensive way to boost precarious forms of employment.”
A study published in February by the think tank Organisation for Economic Co-operation and Development said the country’s income tax must increase by almost 30% to fund a basic income for the whole country.
Finland has denied a request from its social benefits agency KELA to expand the program.
While a basic income is a “trendy new idea” for the Left today, our own government tested similar programs five times in the 1960s and 70s, and a basic income almost became law under Richard Nixon’s presidency. Those studies had mixed results, finding a moderate reduction in work effort (17% among women, 7% among men), but increases in school attendance. There were no improvements to health and the overall well-being of recipients, nor was there any effect on home-ownership rates.
After nearly six decades of basic income studies, there still seems to be few studies suggesting one could be viable.
