Finland has been in the international media’s limelight recently. No, I’m not referring to Juha Sipilä’s dictatorial attempts of conditioning the public broadcasting company. I’m talking about the Finnish government’s experiment of implementing an unconditional basic income, which has been praised by many as a welcomed solution to cut red tape, reduce poverty and boost employment. Sorry folks, but this highly anticipated measure won’t solve any of these problems, except perhaps simplifying bureaucracy a bit.
Before accusing me of being a killjoy, let me start on the bright side. Any measure that simplifies the social security system is very welcome. If in order to apply for a social allowance we have to fill in a single form for a single benefit, instead of choosing from tens of benefits with different names that are essentially the same, that’s great. A simplification of the social insurance system is sorely needed, but we don’t need to reinvent the wheel to achieve this objective.
Let’s take the value of the benefit: 560€. We must remember that the poverty line in Finland stands at 1190€. If the unconditional basic income is complemented by a conditional part that depends on the obligation to search for employment, putting the beneficiary’s income at the level of the current basic unemployment benefit (työmarkkinatuki) – say, 700€ – this is a meagre income which would hardly contribute to shorten the growing Finnish breadlines. In other words, this measure amounts at best to a name change of the already existing basic unemployment benefit, possibly coupled with a reduction of bureaucracy. Wow, truly revolutionary. Especially if we take into account that at the same time the government is cutting more than thirty different types of social benefits, which affect particularly the most vulnerable sectors of society, such as the sick, pensioners, unemployed, students, etc. Besides, we must not forget that the additional costs caused by this policy would surely lead to an increase in taxation. And we all know who would pay the bill.
Being unconditional, it will be possible for the beneficiary to accumulate the basic income with other earnings. Sounds great, right? But what will the effect be upon wages? Will it exert a downward pressure upon salaries, especially in a country with no minimum wage such as Finland? Will the basic income simply become part of the workers’ wages, thus putting society to pay part of the value of labour and therefore expanding capitalist profit at the cost of public resources? If so, no wonder a right-wing government is considering this model.
This is what I find most disturbing in the overall discussion about this subject. The main argument for the unconditional basic income is based on the same premise as the one used to justify cuts in unemployment assistance, forcing the unemployed to take jobs with wages below the unemployment benefits, or humiliating them with mandatory visits to the employment office. This premise is simple: people don’t work because they lack “motivation”. If we had 560€ unconditionally granted to us every month, we’d all be utterly motivated and happily employed, I guess. Sure, it will be easier to accept short-term contracts, but shouldn’t we be trying to eliminate precarious employment instead of paving the way for it?
The Finnish basic income won’t solve a thing
People are unemployed because there are no jobs. A quick search in the Finnish employment office website gives us a total of around 13.000 job openings, while there are more than 450.000 unemployed in the country. On the contrary to what the proponents of the unconditional basic income argue, this alarming unemployment level is not due to technological innovation and the automation of the labour process. Firstly, it derives from a deep economic crisis which led to the closure of companies, collective redundancies, lay-offs, etc. It is not due to the development of the productive forces, but exactly the opposite, their destruction. Secondly, it is the result of the deindustrialization of the Finnish economy, characterized by the widespread practice of social dumping.
If Sipilä, Orpo and Soini really intended to boost employment they’d be shortening the workday duration, promoting public investment and reindustrializing the country. If they wished to combat poverty they’d be distributing the social wealth among those who actually produce it, instead of enabling a few to accumulate it in offshore accounts. In a word, the total of social labour and the wealth thus created must be distributed among all.
Technological innovation and the automation of the labour process is a menace for the working class only within a mode of production based on private property of the means of production. That’s why it’s high time to develop a new mode of production based on new relations of production. That’s why it is high time for the collectivization and democratic management of the means of production, aiming towards an economy guided by the social needs, instead of the expansion of the profits of a parasitic minority.
But we all know that we can’t demand this from a right-wing government led by a millionaire and comprised of conservatives and crypto-fascist populists. These tasks can only be accomplished by a socialist government founded upon mass mobilization by the workers and the popular classes. Unfortunately, no alternative of the kind is on the horizon and a great part of the Finnish left is naively falling for the hoax of the unconditional basic income.
P.S: After drafting this text, I came across a report published by the Social Insurance Institution of Finland (Kela), entitled From idea to experiment. Report on universal basic income experiment in Finland, which confirms some of my objections to this model and adds new elements for the discussion. According to the report, the implementation of the basic income model currently being experimented in Finland will lead to an aggravation of child poverty, as well as among the elderly. The study admits that “the unemployed would be the biggest losers. For them, basic income would only partially replace existing income and the taxation on the remaining unemployment security benefits (…) would be higher than under the current system” (p. 41). With this model, unemployed with contributions to the social insurance system will lose at least 50% of their income. It would also imply much less public resources directed to social assistance allowances (p. 25). In an analysis made by the Portuguese left-wing news portal Esquerda.net, it is also noted that “the report assumes that the economic system – especially for the youth – is, from the start, precarious and based on low salaries. (…) the basic income aims to compensate the salaries that the companies will not pay”. Basically, this is what I said above when referring to the downward pressure exerted upon salaries.