I believe that most people are charitable.  If we have the resources, and if we believe that our charity will make a difference, most of us don’t think twice about helping another person or family in need. 

How proponents of universal basic income think money works.

Wealthy people in the U.S. give away billions of dollars every year to charity.  I personally feel rewarded when I can help relieve another’s burden in their time of need.  However, I don’t like being told that I have to help, and I certainly don’t feel like helping if I think the recipient isn’t deserving or won’t benefit from the assistance.

When I owned Reno Lawn and Landscape, I would offer employment opportunities to those who stood on street corners holding signs that read, “Will work for food.”  None of them ever showed up or took me up on my offer.  Why work when you can beg and probably make more money?   Today, I understand a lot better that, sadly, most of those people suffer from addiction or untreated mental health issues.  Here is what I know for a fact: providing a struggling person cash doesn’t solve the problem, it usually only exacerbates it.  If you asked most people if they would like to make that struggling person’s world worse, they would of course say, “No!”  Yet, giving them money to buy more drugs or alcohol will do exactly that.  Still, we sometimes become enablers anyway, usually with good intentions that our charity will be of some value.

Recently, Finland designed a pilot program to test the “universal basic income” theory with a group of 2,000 randomly-selected, unemployed participants.  (Universal basic income, or UBI, is a type of program in which a government provides a certain amount of welfare or unemployment benefits without any conditions attached.)  Finland settled on awarding each person the equivalent of just under $700 per month.  The recipients are not required to look for work to receive the entitlement, nor do they have to give it up if they do find work.  The theory is that, if  people have enough income to meet their basic needs, it allows them to pursue other things like education or starting a business.

What Finland has found it that, like any program, there are a few who are using the opportunity of supplemental income wisely.  However, it probably comes as no surprise that the majority of recipients are not using it the way it was intended.  People who are resourceful, willing to learn and improve, and take action without expecting an entitlement will always strive for more because that’s who they are.  Receiving a small supplement each month with no strings attached is not going to magically change those who are unmotivated and unwilling to better themselves.

In fact, it would appear that Finland’s universal basic income trial, as well-intended as it was, has had the opposite effect, exacerbating and prolonging unemployment and related issues.  The results of the Finnish trial are a reflection of what happens when you give people “free money,” regardless of who you are or where you are in the world.  With the exception of a few circumstances, giving a person money with no expected return of productivity is a bad idea because most of us feel more fulfilled and accomplished when we are being productive, not when we’re getting something for free.

As crazy as the universal basic income idea sounds, I have to give Finland credit for only running this as a test to find out if it was going to work instead of implementing it as a never-ending entitlement.  I know all of you reading this could have told the Finnish government it wasn’t going to work.  Had they only consulted us first!

Issues like this are complex, with no easy, one-size-fits-all solution to helping those in need.  I have always believed that assistance should come from the private sector, and that, through charities and helping our neighbors in a more grassroots way, we can have a much greater impact than any government agency taking our hard-earned money and giving it away in some large-scale program that lacks enforceable conditions.  Entitlements in themselves do not motivate its recipients to do more.  What gets them motivated to take action, find a job, or start a business is knowing that the entitlement is coming to an end.

I’ve given you the nuts and bolts of the Finnish pilot program (sprinkled with my own opinion), but if you’re interested in learning more about it, here’s a recent article from The New York Times.

— Greg

Finland Has Second Thoughts About Giving Free Money to Jobless People

By PETERS. GOODMAN | APRIL 24, 2018 | Originally published in The New York Times

LONDON – For more than a year, Finland has been testing the proposition that the best way to lift economic fortunes may be the simplest: Hand out money without rules or restrictions on how people use it. The experiment with so-called universal basic income has captured global attention as a potentially promising way to restore economic security at a time of worry about inequality and automation. Now, the experiment is ending. The Finnish government has opted not to continue financing it past this year, a reflection of public discomfort with the idea of dispensing government largess free of requirements that its recipients seek work.

Finland has actually reversed course on that front this year, adopting rules that threaten to cut benefits for jobless people unless they actively look for work or engage in job training.

“It’s a pity that it will end like this,” said Olli Kangas, who oversees research at Kela, a Finnish government agency that administers many social welfare programs and has played a leading role in the basic-income experiment. “The government has chosen to try a totally different path. Basic income is unconditional. Now, they are pursuing conditionality.”

The demise of the project in Finland does not signal an end of interest in the idea. Other trials are underway or being explored in the San Francisco Bay Area, the Canadian province of Ontario, the Netherlands and Kenya.

In much of the world, the concept of basic income retains appeal as a potential way to more justly spread the bounty of global capitalism while cushioning workers against the threat of robots and artificial intelligence taking their jobs.

But the Finnish government’s decision to halt the experiment at the end of 2018 highlights a challenge to basic income’s very conception. Many people in Finland — and in other lands — chafe at the idea of handing out cash without requiring that people work.

“There is a problem with young people lacking secondary education, and reports of those guys not seeking work,” said Heikki Hiilamo, a professor of social policy at the University of Helsinki. “There is a fear that with basic income they would just stay at home and play computer games.”

For centuries, thinkers across the ideological spectrum have embraced the notion of basic income. It has gained favor with the social philosopher Thomas More, the laissez faire economist Milton Friedman and the civil rights leader Martin Luther King Jr., an unusual diversity of support that has enhanced the appeal of the idea as a modern-day solution to economic anxiety in much of the world.

Silicon Valley technologists have suggested that basic income could enable humanity to exploit the labor-saving promise of robots absent the fear of mass joblessness.

Labor advocates have focused on basic income as a means of increasing bargaining power among workers, limiting the pressure for people to accept poverty wages at dead-end jobs.
Other people have advanced basic income as a way of enabling parents to spend more time with their children.

Finland’s goals have been modest and pragmatic. The government hoped that basic income would send more people into the job market to revive a weak economy.

Under Finland’s traditional unemployment program, those lacking jobs are effectively discouraged from accepting temporary positions or starting businesses, because extra income risks the loss of their benefits.

The basic income trial, which started at the beginning of 2017 and will continue until the end of this year, has given monthly stipends of 560 euros ($685) to a random sample of 2,000 unemployed people aged 25 to 58. Recipients have been free to do as they wished- create start-ups, pursue alternate jobs, take classes -secure in the knowledge that the stipends would continue regardless.

The Finnish government was keen to see what people would do under such circumstances. The data is expected to be released next year, giving academics a chance to analyze what has come of the experiment.

In the meantime, Finland has already moved on to consider a broader revamping of its social service programs. It is studying a new form of social welfare policy now in effect in Britain: so-called universal credit, which rolls existing government aid programs into one monthly lump sum payment.

“The social security system is fragmented and has a lot of bureaucracy,” said Liisa Heinamaki,who is overseeing a project exploring ways to reorganize that system. “Discussion about basic income is not over, but it is a part of the larger discussion now.”

In Britain, the shift to universal credit has poor people reeling, depriving many of them of government support while their cases shift from the old system. Benefits have increased for some people, but many recipients have wound up with less.

In Finland, where the social safety net is famously generous, a structure like Britain’s could yield the very thing basic income is supposed to deliver: a guarantee that every member of society can be assured of sustenance and shelter.

This may be the main reason that basic income has lost momentum in Finland: It is effectively redundant.

Health care is furnished by the state. University education is free. Jobless people draw generous unemployment benefits and have access to some of the most effective training programs on earth.

“In a sense,” said Mr. Hiilamo, the social policy professor, “Finland already has basic income.”

Mari-Leena Kuosa contributed reporting from Helsinki.