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EU Government The Almighty Buck

Finland's Universal Basic Income Called 'Useless' By Trade Union Economist (bloomberg.com) 723

An anonymous reader quotes Bloomberg: Finland's basic income experiment is unworkable, uneconomical and ultimately useless. Plus, it will only encourage some people to work less. That's not the view of a hard core Thatcherite, but of the country's biggest trade union. The labor group says the results of the two-year pilot program will fail to sway its opposition to a welfare-policy idea that's gaining traction among those looking for an alternative in the post-industrial age. "We think it takes social policy in the wrong direction," said Ilkka Kaukoranta, chief economist of the Central Organization of Finnish Trade Unions, which has nearly one million members.

Since January, a group of unemployed Finns aged between 25 and 58 have been receiving a stipend of 560 euros ($600) per month. The amount isn't means-tested and is paid regardless of whether the recipient finds a job, starts a business or returns to school... Advocates say it eliminates poverty traps and redistributes income while empowering the individual and reducing paperwork... While limited in scope (it's conditional on the beneficiary having received some form of unemployment support in November 2016) and size (it's based on a randomly-selected sample of 2,000 jobless people), the Finnish trial may help answer questions like: "Does it work"? "Is it worth it"? And the most fundamental of all: "Does it incite laboriousness or laziness...?"

The trade union argues this UBI program would cost 5% of Finland's entire gross domestic product, making it "impossibly expensive."
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Finland's Universal Basic Income Called 'Useless' By Trade Union Economist

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  • by hackwrench ( 573697 ) <hackwrench@hotmail.com> on Sunday February 12, 2017 @12:37AM (#53849017) Homepage Journal
    How do we measure the economics of the situation?
    • Translation: (Score:4, Insightful)

      by thesupraman ( 179040 ) on Sunday February 12, 2017 @12:47AM (#53849065)

      I think the original has been improperly translated.
      I think a more accurate translation may be:

      'How dare someone try a system that treats everyone equally, and isnt controlled by US!
      Our research shows that the best trade union members are poor and unhappy, we need more people like that!
      The LAST thing we want is a feeling of happiness and satisfaction for our members, they they may not need us,
      and if they dont need us, then how will we be able to take their money so we can live the high life?
      No, UBI is a terrible, horrible idea, bad for everyone who matters, which are the leaders of our trade union movement!'

    • by Okian Warrior ( 537106 ) on Sunday February 12, 2017 @01:10AM (#53849157) Homepage Journal

      How do we measure the economics of the situation?

      That's a very good basic question to ask.

      Too many times people get up on the soapbox of the world and give their opinion about this or that policy, and one can never figure out whether they are experts speaking from experience or just political hacks.

      People giving an opinion in public is just noise, and people bolstering their opinion with rationalization and/or analogy is noise masquerading as signal.

      We shouldn't give any credence to anyone who tries to sway our opinions about, well... anything, unless they can back it up with facts that are suggestive or studies that can be examined in detail.

      I'm especially suspect of the "it will only encourage some people to work less" comment, as if that is a bad thing. It might be perfectly acceptable for some part of society to have to work less, or perhaps not to have to work at all. There's a parallel and opposite rationalization that holds that people will accomplish great things [wikipedia.org] when given enough leisure.

      Making that statement ("some people" is an obvious attempt at being divisive, as in "you know the type of people I mean") in the way that he made it is simple emotional manipulation. Also from the article are such gems as "We think it takes social policy in the wrong direction", meaning basically "I don't like it, in an unspecified and indeterminate way".

      He's not claiming that it doesn't work, he's claiming that he doesn't like it (and neither should you).

      • by Anonymous Coward on Sunday February 12, 2017 @03:03AM (#53849597)

        He's not claiming that it doesn't work, he's claiming that he doesn't like it (and neither should you).

        The money quote from the article is this one

        The labor group says the results of the two-year pilot program will fail to sway its opposition

        In other words you are 100% right. He doesn't care if it works or not; he's set to oppose it no matter what.

      • Just a thought, but perhaps a small, left-leaning country could launch a trial program, using randomized participants, and then we perform a longitudinal study on those recipients for a period of, say, 3-5 years to measure its efficacy and cost-effectiveness. Oh, wait...
    • Luckally money is a unit of measurement.
      1. How much money did you use to tax the population vs how much you will need to tax the population now.
      2. Find out if the average percentage of a persons tax per wage has gone up?
      3. Factor in any government dept needed to be payed for the service.

      Now if we find the side effect of a basic income is laziness then you will find that incomes will stagnant so your tax revenue will too if using a progressive income tax. If you find that people invest into this safety net t

      • by pixelpusher220 ( 529617 ) on Sunday February 12, 2017 @03:30AM (#53849673)
        the one thing is though that you get guaranteed tax revenue as well. Since those people are buying necessary goods and services with the money.

        It obviously doesn't likely work very well with no one working, but that won't be a realistic society anyway. There will always be those who want to work.

        as others have noted, the coming automation wave is going to wreak havoc on over a century of employment concepts. Something needs to change as the vast majority of low income/skill jobs are going to just disappear being replaced by a fractional number of higher skill tech/maintenance workers
        • by JaredOfEuropa ( 526365 ) on Sunday February 12, 2017 @07:11AM (#53850175) Journal

          the one thing is though that you get guaranteed tax revenue as well.

          And that's another important issue of basic income: not the cost per se, but the fact that in many countries the bulk of tax revenue comes from income taxes. That will have to change if people are going to be working less, regardless of whether they do so by choice or they are replaced by robots. Taxing consumption more heavily will reduce consumption and at some point necessitate an increase of the basic income. Taxing production is an obvious solution; during the replacement of human labour with robots we could levy an "income tax" on robots, but that would only work on a level playing field or in an autarky; in our own globalized world, production would simply flee to the country with the lowest tax on production as it does now.

    • by raymorris ( 2726007 ) on Sunday February 12, 2017 @03:25AM (#53849653) Journal

      Some people think it will work very well, some people think it'll be a total failure, and of course some people are in-between.

      For anyone here in EITHER of the first two groups, you both think the results would be pretty clear cut - the result won't be ambiguous. Here we have an actual experiment to test it, and there are other similar experiments being done or planned. Here's a chance to prove that you're right, and possibly in a measureable way such that those who disagreed have to admit their prediction was wrong.

      Are you smart enough, and do you understand the issues well enough, to come up with some fair criteria by which to judge the outcome of these experiments? Can you mark a goal line and say "the experiment will show that UBI does A by x%, without doing B by y%"?

      Since you understand the issues, that means of course that you understand the opposing viewpoint, you understand what their concerns are. Since you're pretty sure you are very much right, you should be able to be a bit generous in marking the goal lines. If anyone can come up with some fair measures we can later use to see who is right and wrong, I'll post my prediction and if I turn out to be wrong I'll freely admit it.

      That would be really cool if we could do that. I don't have too much hope - I think a lot of people shooting their mouth off don't understand at all what people who disagree are saying, and have no interest in understanding anything other than their own guess. The ad hominem attacks which are already so prevalent on very page strongly suggest that some commenters haven't a clue what the other group is trying to warn them about, and don't care to know.

      Anyway, there are experiments in progress. Anyone have an idea of some fair to generous criteria by which to judge the results when it's done, can you set a goal line which those who disagree might think is a fair goal line that captures their concerns?

      • As example of the general kind of thing I'm asking for, early in his first term Obama said something like "if unemployment isn't below 5% by 2012, you shouldn't vote for ... well you should think real hard about who to vote for."

        It was fairly obvious he has started to say "if unemployment isn't below 5% by 2012, you shouldn't vote for me for re-election", then decided halfway through the sentence to change his words slightly. Anyway, he gave a clear, objective number by which to judge his performance. M

  • by r1348 ( 2567295 ) on Sunday February 12, 2017 @12:40AM (#53849033)

    If people become indifferent to unemployment, trade unions have no reason to exist anymore.

  • by RyanFenton ( 230700 ) on Sunday February 12, 2017 @12:45AM (#53849055)

    Here's the thing - basic income CAN theoretically not work out... but some an economist with a stake or two against it working is NOT evidence that this version of it hasn't panned out. Especially when it's posted on fricken Bloomburg news!

    That's what the experiment is for. Instead, it's to see if the money spend on THIS style of program is as effective as the several other programs it can replace, and whether that replacement will be practical. It's money that will be spent in any case! You need experimental comparison to judge the merit of the approach.

    Again though - until RESULTS are in, hearing some talking head berate the idea of it as not to his liking isn't helpful.

    It's like folks who dismiss needle exchange programs to reduce communicable disease, without actually bothering to look at the numbers, and what the studies actually account for.

    Ryan Fenton

    • by Gravis Zero ( 934156 ) on Sunday February 12, 2017 @01:40AM (#53849299)

      Here's the thing - basic income CAN theoretically not work out... but some an economist with a stake or two against it working is NOT evidence that this version of it hasn't panned out.

      Business folk (the type that like exploiting cheap labor) are terrified they are going to lose their leverage on people so they are summarily declaring it a failure. It could have been the single most successful thing on day one and they still would have declared it a failure because it's a threat to their way of life. That is to say that their way of life is exploiting people's food/housing insecurity, the modern form of slavery.

      • by Unknown User ( 4795349 ) on Sunday February 12, 2017 @04:23PM (#53852247)
        Ironically, the 1% richest of any country already have their basic income for sure and it seems to work out fine for them. Maybe some of them work less (Richard Branson?), but I've never heard some billionaire call out his fellow billionaires that they are just lazy and don't contribute enough to society, and most of them seem to work no less than anyone else.
    • Must be a trade union for psychics:

      The labor group says the results of the two-year pilot program will fail to sway its opposition to [Universal Basic Income]

      Good thing they warned the Finnish government before they wasted time and money on that pilot program.

    • when you've decided not to abandon drug users to their fate. Basic income is an attempt to work around that issue by giving it to everyone so folks can't complain about what's 'fair'. That's pretty much what shoots social welfare down over and over again, folks don't think it's fair that you don't have to suffer. I've had nerd friends who felt angry & upset that kids today don't have to go through what they did (the bullying and what have you) post Columbine. I've pointed it out to them and they agree i
  • work less (Score:4, Insightful)

    by phantomfive ( 622387 ) on Sunday February 12, 2017 @12:55AM (#53849097) Journal
    I haven't seen anyone come up with a good reason people wouldn't use basic income to work less and be lazy. I can tell you, if I had guaranteed income for life, I would probably not ever work again.
    • Re:I can tell you (Score:3, Insightful)

      by hackwrench ( 573697 )
      Well, if none of what you do earns any income, people will say it isn't work.
    • Guaranteed subsistence level income.
      Then there is the thorny issue of if you're willing to sit on your ass for a small income, and do nothing productive, what are the chances that you were less than productive at work, and a drag on your coworkers.

      Imagine some employers without those who are simply pretending to work.

      • I own my house free and clear. Taxes and monthly expenses are very small and can live very nice on little money. A basic income would be enough for me to buy another rental property increasing my small income.
    • Re:work less (Score:5, Insightful)

      by Daemonik ( 171801 ) on Sunday February 12, 2017 @01:11AM (#53849159) Homepage

      The question is, however, define "work". Would you labor for someone else? Probably not. But you likely wouldn't sit on your butt all day doing nothing either. Maybe you join a club, start a band, discover an aptitude for art, start your own business.. who knows?

      The inescapable fact, however, is that what you conceive of as "work", going to a building someone else owns and laboring for them, is going to decline as automation, AI and robots improve, so something has to be put in it's place that's better than "labor a robot won't do".

    • by Okian Warrior ( 537106 ) on Sunday February 12, 2017 @01:19AM (#53849205) Homepage Journal

      I haven't seen anyone come up with a good reason people wouldn't use basic income to work less and be lazy. I can tell you, if I had guaranteed income for life, I would probably not ever work again.

      Here you go [wikipedia.org].

      You have to realize that "work" may not be going out and doing a 9-to-5 job in the traditional sense. Newton made a bunch of his discoveries while on forced leave from Cambridge due to the plague, and there are many historical examples of well-to-do scientists and explorers and artists who made great discoveries because they had the leisure and means to do so.

      Stephen King was dirt poor for much of his early life, but he still wrote because he loved writing. Imaging how much more he could have contributed to popular literature if he didn't have to take back-breaking jobs as a young man to make ends meet.

      Not everyone will be Newton or King, but anyone who takes up a hobby or minor occupation and becomes really good at it might extend the frontiers of that area. All of this has the potential to enrich our society and further our scientific knowledge.

    • by Imrik ( 148191 )

      If you have enough money to live on, but not enough to pay for entertainment, what will you do with your time?

    • by sjames ( 1099 )

      Have you considered that that says more about you than it does about the basic income?

      As for evidence against your couch potato theory, I present to you Linux, volunteers in all sorts of charitable organizations, various community projects, and retired people I have known who took part time jobs to relieve boredom and be with people.

      The latter showed me some of the reasons the capital class fears the basic income. Though the retirees didn't really bargain that hard for maximum pay, they absolutely had to be

      • Linux is the fun stuff. Talk to me when you get someone doing Peoplesoft templates for fun.
      • and retired people I have known who took part time jobs to relieve boredom and be with people.

        This is evidence against basic income: the vast majority of retired people don't work.

    • Re:work less (Score:5, Insightful)

      by Tom ( 822 ) on Sunday February 12, 2017 @03:52AM (#53849739) Homepage Journal

      Talk to long-time unemployed people and ask them if they would work given the chance. Most of them will answer in the positive. Sitting around being lazy is wonderful if you are a working person, because it is a change from your usual routine. Once it becomes your routine you absolutely want to work again.

      Of course there are exceptions. Many of them have other problems (alcohol, drugs, etc.) that are unrelated to UBI.

  • Too low (Score:5, Insightful)

    by manu0601 ( 2221348 ) on Sunday February 12, 2017 @12:56AM (#53849103)

    UBI is very different when the sum is enough to live or not.

    If it is too low (and at 560 euro/month it is certainly too low to pay housing and food), then people still have to accept any job to live, and employer can pay less because decent living costs are already partially covered by UBI. In such a situation, UBI acts as a social support to employer without taking any power from them.

    OTOH, with a UBI high enough to cover basic needs, things change a lot. Employers need to convince people to enroll them instead of the other way around, while people can also choose to start businesses that have social benefit without being profitable.

    Of course that consideration do not cover the huge question: how to find the money for high UBI? Some specialists consider a high UBI possible if all national labor costs are socialized: Instead of paying employees, employers contribute to a labor fund which in turn pays UBI to people. I have no idea if this is workable or not

  • an give it to everyone to really see how it will pan out. Then maybe we can stop wasting so much energy debating hypotheticals.
  • by Gravis Zero ( 934156 ) on Sunday February 12, 2017 @01:34AM (#53849267)

    "If you do not have basic security you cannot be rational,"

    Exactly.

    Not only does SAK say that the system may reduce the labor force -- for instance by tempting mothers of small children or those close to retirement to take more time off -- but the union also suggests that making it easier to refuse unpleasant jobs may create inflationary bottlenecks.

    We have automation so that we didn't have to perform unpleasant of dangerous jobs! Not enough workers? AUTOMATE IT! Can't automate it? Pay people what the job is actually worth!

    This is how the future should work.

  • An organization whose only reason to exist hinges on people being unable to tell their boss "Stuff it, slaver, I quit!" when he makes unreasonable demands is against something that enables people to just get up and leave jobs with insane employers?

    That's unpossible!

  • The entire reason UBI is going to become a necessity is because much of the world will soon be post-labor. Automation will make the vast majority of humans unemployable, probably by 2030, and no later than 2050.

    The unions will argue that the appropriate response to this is to outlaw automation, to hamstring its progress by demanding that it adhere to ludicrous regulations where it is used, and to otherwise do everything in their power to keep their power, just like any other political entity. Most unions
  • The U.S. spends 1.27 Trillion on Social Security Unemployment and Labor

    https://www.google.com/imgres?... [google.com]

    That's just at the federal level and at a guesstimate is close to 8% of the economy. It would be great to eliminate that and get the number down to 5%

  • by jcr ( 53032 ) <jcrNO@SPAMmac.com> on Sunday February 12, 2017 @03:16AM (#53849625) Journal

    and a lot of them will do exactly that. Your economy loses whatever productivity they might have contributed, socialists get more dependent voters to re-elect looters, and their kids grow up believing the world owes them a living.

    You have only to look at the effects of multi-gerneration welfare dependents in the USA and the UK to know how destructive this is.

    -jcr

    • by gweihir ( 88907 ) on Sunday February 12, 2017 @04:05AM (#53849755)

      You seem to somehow have missed that most jobs will go away and not be replaced with others. Hence your statements make no sense. Nobody is really advocating for an UBI if enough jobs stay available and need to be done.

  • by hkultala ( 69204 ) on Sunday February 12, 2017 @03:27AM (#53849657)

    I live in Finland, so few comments about the SAK.

    SAK is worker union that has jammed to 1970's.

    There are only 2 things SAK is capable of doing:

    1) Shouting "bigger pays of we will go to strike"
    2) Shouting "you may not do any improvements for more flexible work contracts, or we will go to strike".

    Absolutely no understanding that the world economy has changed since 1970's, and absolutely no understanding od thet fact that finland has been belonginf to EU for over 20 years should make things very different than things were in 1970s.

    Also absolutely no understanding of the fact that Nokia was holding Finnish economy high and now when Nokia is no longer making mobile phones, Finnish economy is doing much worse and they cannot require so high wages anymore.

    In Finland the worker unions are way too strong, they have some rights (or actually wrongs) worker unions in other countries do not have:

    1) The worker unions also decide how much is paid to employers that are not members of the union.
    2) You get tax rebates for belonging to worker union.
    3) In order to get better unemployment benefits you HAVE to belong to some unemployment fund, even though only about 1% of the unemployment compensation money comes from the unemployment fund, 99% comes directly from the goverment. Most of these unemployment funds are ran by the worker unions. (fortunately there is also one private on, "YTK", "common unemployment fund", but many people do not know it exists)

  • by ErichTheRed ( 39327 ) on Sunday February 12, 2017 @03:31AM (#53849677)

    A perfect example of basic income working is the longshoremen's unions in the US. Before containerized freight and automated cargo terminals, thousands of men would stand on the stones every morning and work a back-breaking job hauling loose cargo off ships with hooks. After containerization, instantly, there was no more work for the vast majority of these people. Since most of them were completely unskilled, and not capable of retraining into any other job that paid the same or better, they could have been in danger of seing the same fate we assign to the unemployed today -- eventual destitution. However, the longshoremen's unions implemented what amounts to a tax on cargo handled through these automated terminals that goes towards paying "retired" longshoremen a basic income. This is one example, and let's just say the union has a lot of muscle behind it that helped this get passed, but it does show a way to help the unemployable -- and make no mistake, that's going to be 90+% of us sometime before I'm dead (in the next 50 years or so.)

    I guess my problem with people who argue against a basic income is that they don't have a better alternative in mind. Sometime in the near future, the vast majority of low level service jobs will be automated. At the same time, the use of intelligent systems will come and cannibalize the top end of the spectrum too. Think about doctors for a second -- they're smart enough to have a regulated profession and should be fine because of that. But what if they didn't? Medical education is basically academic hazing, from the MCAT to the preclinical firehose to 100 hour weeks as an intern. Med schools select for people with photographic memories and perfect grades because that's basically the only way to survive the training as it is today. Well, thanks to Google we don't need photographic memories anymore, so the only skill left will be synthesis of all the stored knowledge. This is why IBM basically sold off their entire business and are building Watson and other AI-type systems. Soon as these algorithms get good enough, most work that requires intuition is toast. Hospitals won't have to pay doctors when they can feed test results and live observations of patients into a machine and get a diagnosis.

    I think basic income is the only reasonable transition vehicle to move the world away from traditional employment. Imagine telling everyone who's about to retire that people entering the workforce now won't have to save. Or, tell people who define themselves by their work that they've all been made redundant at the same time. Or, try to divide up the accumulated property among people when money stops being critical -- who determines where the renters go, or who gets to keep the houses they own? All of these are too much stress for the economy to bear all at once and will lead to a mess. Phase in a low-employment world over time with controls, and it makes the shift easier.

  • by gweihir ( 88907 ) on Sunday February 12, 2017 @03:55AM (#53849743)

    How other could they see "it may encourage some people to work less" as a problem, when that is precisely the intent? The problem tackled by an UBI is primarily the scarcity of work, nothing else.

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