Finland's unemployment solution: A benefit for all?

Finland is often cited as a beacon of so-called progressive politics, and thinking outside the box. In fact, their most famous idea was very much inside the box.

When infant mortality rates were high, the Finns introduced a Baby Box that's given to all new mums and turns into a cot. Now Finland has one of the lowest rates of infant mortality anywhere in the world.

The Finns also rank near the top of various league tables for life expectancy, education, and income equality. Its people are apparently among the 'happiest' in the world.

So when the Finnish government decides to try a new idea for tackling unemployment, the rest of the world should perhaps pay attention.

Unemployment in Finland is at 8%. Credit: ITV News

The unemployment rate in this small Nordic nation is, it must be said, less enviable than its other achievements. In a population of just over 5 million, unemployment is around 8% - that's 3% higher than the UK.

To get that number down, the Finnish government is now paying citizens a salary, just for being citizens. It is called a Universal Basic Income.

In truth, it's not quite 'universal' yet. Only 2,000 unemployed people have been selected at random by the Finnish government for a two year-trial of the idea.

The government hopes eventually to roll it out to the whole nation.

Universal Basic Income is an idea that has been debated in lecture theatres and town halls for decades, but it rarely makes it beyond theoretical arguments into reality.

The concept is simple: everyone in the country is given the same flat-rate payment from the government, whether they're employed or not.

In Finland, that payment is €560 (£483) each month, but others argue it should be even more, or even less.

So why should the government pay its citizens a salary?

Could a Basic Income revolutionise the welfare system? Credit: ITV News

The idea is it guarantees people have money to live, and it cuts through the bureaucracy of the means-tested benefits system.

Then people can choose to supplement their Basic income by working as often or as little as they like, crucially, without losing any benefits.

The Basic Income is also tax free, but any money you make above and beyond it will be taxed progressively.

Universal Basic Income as an effective alternative to the current welfare model is gaining traction around the world and across the political spectrum.

The left like it as a means to properly tackle poverty; the right are fond of how it cuts endless layers of costly bureaucracy in welfare.

In Finland, I met a mother-of-two, Rosa, who has been unemployed for the last five years.

She decided she was better off on benefits than in work because the only jobs around were part-time or short-term contracts.

Mum-of-two Rosa said the Basic Income has allowed her to take any job. Credit: ITV News

It wasn't worth her signing off from her benefits to take on a minimum wage job for a few days a week only to have to sign on again in a few months.

However, since being selected for Finland's Basic Income trial, she's already started training for a job in a cafe and she's looking for as many hours as she can get.

She knows that working doesn't affect her Basic Income, and now she just wants to earn as much as she can on top of that to help her family.

The Basic Income is also inspired by fundamental changes in the workplace and the decline of steady jobs in traditional industries.

Many of the jobs in Finland's pulp mills or Glasgow's shipyards have been replaced by the so-called gig economy, where pay is low, contracts are often casual, and periods of unemployment are more common.

For people like Clem, a Basic Income could offer more stability. Credit: ITV News

In Glasgow, I spoke to a bicycle courier, Clem, for my report. He has two jobs and irregular hours. He doesn't know how much he's going to earn each month, and often lives hand-to-mouth.

For people like him, a Basic Income may offer some kind of stability where they know there will always be at least some money coming in.

Then there was Mohammed. I met him just outside Helsinki as he's long-term unemployed, and the Finnish government has just selected him as part of their trial.

They want to know if replacing his means-tested benefits with a guaranteed basic Income will help him get back into work. He says it won't.

The Basic Income gives Mohammed more per month to live off than benefits. Credit: ITV News

He's quite blunt about it: the Basic Income gives him more money than he was on through benefits, and he's quite happy to live off €560 per month. He may decide to work on future, but he's in no rush.

This is one of the reasons trade unions in Finland have opposed the Basic Income, fearing it takes away the invective to work.

They also attack the cost of the scheme, fearing it will plunge the whole county into massive debt, encourage people to move to Finland just to take the Basic Income (€560 is a lot of money for a lot of people in the world), and ultimately it will lead to a country where nobody wants to take on poorly-paid but essential hard work when you can just get away with doing a few shifts here and there in cafes and bars.

There's also an argument that it covers for big businesses making cutbacks and creating more precarious working conditions, rather than challenging them to provide better jobs with more stability.

The creator of the trial in Finland is Olli Kangas.

I put these concerns to him and his answer was simple: "We just don't know."

It's true. So far we have lots of confident arguments for and against the merits of Basic Income but precious little evidence of how it can work in practice.

The world is watching Finland. Credit: ITV News

The Basic Income has actually been tried before in small-scale trials, but what's happening in Finland is the first time it will have been tested on a nation-wide scale.

The world is watching what happens in Finland because the problems they are trying to address are seen elsewhere.

The instability of the gig economy puts pressure on the state to support people in and out of casual work, and an increasing number of people without the safety net of pensions and sick pay.

A similar trial of the Basic Income is now being considered in Scotland.

The councils of Glasgow and Fife are giving serious consideration to their own pilot, though they admit this is still a long way off and the funding of it could be a problem.

First, they will watch Finland. Someone always has to jump first to test how deep the water is. But if it is a success, and if it makes a difference to unemployment figures, expect to see more countries around the world taking the plunge.