Tuesday, May 12, 2020

Stephen Lunst - Finland's Universal Basic Income Trial Elicits Positive Results And Improved Wellbeing

The Finish Basic Income experiment didn't fully test the idea.

Once people got a Basic Income they were more prepared to take on a low income job. I guess it makes it feel more worthwhile and also less stressful. It shows how incentives can work - the carrot or the stick.

However, the Finnish study is not a true test of UBI for two reasons: Instead of giving money to a random sample of the population, or perhaps a representative region, all the beneficiaries were unemployed when the study started. Secondly, participants only received €506 ($549) a month, hardly an amount sufficient to live on, as UBI is usually imagined.

Nevertheless, the study offered an opportunity to test how getting no-strings-attached money would change recipients' job-seeking behavior and affect their mental health. Unlike previous smaller experiments, a control group was included.

Opponents of UBI argue free money will cause people to choose not to work, undermining society's capacity to make the payments in the first place. A survey sent to all participants and controls, along with in-depth interviews of a random sample, contradicts this.

Stephen Lunst - Finland's Universal Basic Income Trial Elicits Positive Results And Improved Wellbeing

15 comments:

Andrew Anderson said...

Once people got a Basic Income they were more prepared to take on a low income job. kv

Yes, while the purpose of a JG is to PRECLUDE that by consuming the time and energy of people in not-necessarily productive ways (e.g. using shovels rather than bulldozers).

So which approach is actually the least inflationary? Besides being the more just?

Not that price inflation is necessarily bad - if it is produced justly, e.g. via equal citizen's dividends.

Marian Ruccius said...

Kaivey, what an INSANE comment by you: "Once people got a Basic Income they were more prepared to take on a low income job. I guess it makes it feel more worthwhile and also less stressful. It shows how incentives can work - the carrot or the stick."

The point is that the basic income drives down average wages, since, pace Kalecki, employers not longer have to pay their employees living wages. It promises to be a disastrous policy, which would reward Jeff Bezos at the expense of wage labourers. https://neweconomics.opendemocracy.net/universal-basic-income-is-a-neoliberal-plot-to-make-you-poorer/

Or read Mario Seccareccia on Speenhamland or some of Bill Mitchell's work. For instance:

Mario Seccareccia (2015) Basic Income, Full Employment, and Social Provisioning: Some Polanyian/Keynesian Insights, Journal of Economic Issues, 49:2, 397-404, DOI: 10.1080/00213624.2015.1042743

Seccareccia, Mario (2010), “Employment and poverty: a critical perspective on guaranteed income programs”, in Introducing Microeconomic Analysis: Issues, and Competing Views, ed. H. Bougrine, I. Parker and M. Seccareccia, pp.337‐47. Toronto: Emond Montgomery Publications, 2010.

Mario Seccareccia, 2015. "Basic Income, Full Employment, and Social Provisioning: Some Polanyian/Keynesian Insights," Journal of Economic Issues, Taylor & Francis Journals, vol. 49(2), pages 397-404, April.

W.F. Mitchell and Watts, M.J. (2004) 'A Comparison of the Macroeconomic Consequences of Basic Income and Job Guarantee Schemes’, Rutgers Journal of Law and Urban Policy, 2 1-24

W.F. Mitchell and Watts, M.J. (2004) 'A Comparison of the Macroeconomic Consequences of Basic Income and Job Guarantee Schemes’, Rutgers Journal of Law and Urban Policy, 2 1-24.


Andrew Anderson said...

Ideally, ALL labor for others should be VOLUNTARY anyway as it largely would be if we had a just economic system, e.g. the well-off often volunteer their labor. Why then is wage-slavery the norm rather than the exception?

But the MMT School isn't interested in justice or they would be in favor of de-priviliging usurers rather than promoting wage slavery for their victims.

Kaivey said...

We also have a minimum wage, so wages can't be lowered.

Andrew Anderson said...

Yes, we have minimum wage laws so the purpose of a buffer stock of pre-broken wage slaves must not be to put a floor on wages but to put a CEILING on them.

Not that I argue for a UBI but that ALL fiat creation be for the general welfare, including equal Citizen's Dividends to replace all fiat creation beyond that created by deficit spending for the general welfare. Who can argue with that?

Kaivey said...

I don't think it's that insane, if you're going to be miserably poor doing miserable job, you might prefer to stay at home.

Marian Ruccius said...

It is insane because you are miserably poor BECAUSE of the UBI!

The only way for labour to seize a larger share of national income, i.e. to begin to reverse functional inequality, is to increase its bargaining power. Because of inflation targeting policies, and the end of full employment policy, not only have wages stagnated, but in addition, households have been working much longer hours for the same or declining incomes. They have been doing so because of the decline in the bargaining power of labour, and because of the related financialization of policy (which drives inequality and household indebtedness, as even low levels of aggregate demand can only be sustained by increasing private debt). In other words, the exploitation of labour is vastly intensified in conditions of rising unemployment, which the UBI entrenches. So all one is doing through a UBI is further deepening income and wealth inequality, and disempowering workers, while sustaining the incomes of the super-rich. If you want labour to retain and progressively increase their share or what they produce -- i.e. reduce their exploitation -- then you have to support full employment. The best, but not the only, way to do so is create a buffer stock of the employed, rather than a buffer stock of the unemployed. The UBI is just the dole, in frilly pink tutu.

Marian Ruccius said...

I meant to type "share OF what they produce"

Andrew Anderson said...

The only way for labour to seize a larger share of national income, i.e. to begin to reverse functional inequality, is to increase its bargaining power.

Except automation is making that an increasingly obsolete strategy.

The MMT School should instead focus on ethical finance (and asset redistribution to address previous un-ethical finance) and then we'd ALL benefit from automation.

Also, while a UBI might be called a "dole", an equal Citizen's Dividend to replace all fiat creation beyond that created by deficit spending for the general welfare is immune to that sort of criticism - being an ethically unimpeachable natural right.

S400 said...

“Except automation is making that an increasingly obsolete strategy.”

Keep on dreaming.

S400 said...

The reason people under the UBI experiment in Finland got better mental health is due to how their job seeking procedures are setup while not on anUBI. You lose employment benefits if you don’t declare what jobs you’re seeking so it feeds a sense of doing completely meaningless things which is mentally unhealthy. Seeking jobs when there are far to few of them and seeking jobs that you know you have no chance of getting under the pressure that if you don’t you’ll loose your employment benefit is meaningless. But that is how people are treated and it is a part of the system to make those who have jobs even tho they hate them or are too low paid to stick with them.

You can easily get better mental health among unemployed by going back to the system of full employment and a employment benefit which does not require you sit and look at a computer looking for jobs that are not there in a room with other unemployed.
That system used to be in place in the 1980 and it worked well.

Marian Ruccius said...

S400 is quite right on all points. Especially Andrew Anderson's nonsensical argument about automation. The extent to which automation is now expected to replace jobs is much lower than the hysterical accounts of even a couple of years ago. Some 14 percent of jobs by most reliable estimates could be eliminated over the next 15 years. And, even that calculation fails to take into account that for the most part it will not be jobs but certain TASKS which will be automated -- with the result that most jobs will NOT be eliminated by machine learning decision machines or advanced robotics.

Besides, if there is one lesson of the COVID-19 crisis, it is that low-paid, repetitive labour of many forms provides essential services, and as S400 notes, that will not change soon.

But all these good reasons why Anderson's point is wrong are also entirely irrelevant, because, even if the most technologically optimistic (and therefore climate-change ignorant) predictions about automation hold true, that fact has no relevance for the ability of currency-issuing governments to create meaningful, living wage jobs for those who would otherwise be unemployed. There is no finite number of activities that people can be hired to engage in. Some possibilities are obvious, e.g. elder care, personal support services, artistic endeavours. But beyond that, the opportunities for people to work on environmentally-friendly projects will be unlimited, or limited only by the imagination. Even in green economy occupations where automation can play an important role, it will always be less wasteful and simply more practical to have people add their own labour to efforts fight climate change and environmental destruction. There will be no shortage of green economy or green social needs to be fulfilled (but none of those can be met by UBI recipients as they deskill day by day doing nothing).

S400 said...

“There is no finite number of activities that people can be hired to engage in“

Exactly! There are nothing that says that the definition of paid work cannot change with how society change. It has done that through history and will continue to do so.

Poor imagination together with power to influence what is to be considered paid work is the worst for future society building.

Peter Pan said...

You won't be getting a JG (or a UBI, or fiat accounts) until Jesus descends from Heaven on a unicorn, and commands the ruling class to implement those policies.

Sorry, but failing to organize politically has its downsides.

Marian Ruccius said...

Peter Pan is right, but we have to know what to organize for, too. it's not all process!