As global economies become more unequal, and as the incomes of working people have stagnated to the point of barely affording them a decent livelihood, a small groundswell of support has developed for one revolutionary solution for evening out wealth and opportunity: a universal basic income (UBI), which is a flat payment delivered to all members of a community, regardless of means or employment status.
The idea certainly sounds good on paper. But does it work? Around the world, multiple trials are trying to answer that question, but many, like Finland, have not been universally applied: Y Combinator’s planned pilot in Oakland, California, set to launch this year, will target only low-income people. A program in Stockton, California, will only give it to select families. The Magnolia Mothers’ Trust in Jackson, Mississippi, serves low-income black mothers. Ontario’s basic income, which was cancelled last year by the newly elected conservative government but notable for its large scale, only served people at the lower end of the economic spectrum. Another trial in Finland just finished, and while it was designed in a way that makes it even less comparable than the others to a true UBI, it still has some interesting lessons.
This, however, is not a cause for hand-wringing over the potential of UBI. Pushing people to work is not, after all, one of the aims of a true UBI. As Matt Bruenig, founder of the progressive think tank People’s Policy Project told Fast Company last year, the Finnish trial acted more like an incentive-based policy designed to push people into the labor market.
According to the Finnish government’s report, people who received the basic income payments still used around 83% of the standard unemployment benefits they received before. The basic income payment was not enough to totally replace those unemployment benefits, and if people receiving the monthly stipends took a job, they’d lose access to the assistance programs they still depended upon.
So can we draw any meaningful conclusions about what a true, well-structured UBI would actually do from Finland’s trial?
Yes: In terms of intangibles like stress levels, trust in government, and overall well-being, even Finland’s poorly designed basic income worked wonders. Compared to the control group, monthly payment recipients reported a 37% reduction in depression levels, a 22% improvement in confidence for their futures, and an 11% bump in faith in politicians. These results, Marinescu says, track alongside findings from other studies examining the effects of cash bonuses on people. People living on Native American reservations who receive stipends from casino profits, for instance, report lower levels of stress and depression. “There’s a broadly consistent effect of feeling financially safe,” Marinescu says.
It’s not accurate to say that Finland’s trial was a success. Its goal was conservatively motivated and misaligned with what UBI sets out to accomplish. But a true UBI ultimately aims to make life better for the people who receive it. Finland’s program began to accomplish that, and it’s not hard to imagine what kinds of benefits a more robust and considered basic income program could deliver.
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