In June, the City Council of Utrecht in The Netherlands announced that starting January 2016, a few lucky residents will receive a monthly stipend to cover their basic needs with no strings attached. That means that the recipients will have to do nothing in return and can spend the rest of their days lounging by a pool if they so wish.
Of course, the officials who are working on this social experiment with researchers from the University of Utrecht, hope that will not be the case. Instead, they believe a guaranteed basic income will motivate residents more than the current welfare program that is conditional on them seeking a job.
While that may seem strange, proponents believe that when people do not have to worry about paying for basic needs, they are motivated to seek out other opportunities. This could range from going back to school, to achieving a better work-life balance with flexible hours or even, giving back to society by volunteering.
Utrecht City Alderman Victor Everhard believes that the freedom to choose allows individuals to make more meaningful contributions to society. And he is not the only one. Earlier this week, the neighboring city of Tilburg announced it would conduct a similar social experiment to try to improve the lives of its 200,000 residents.
To be clear, basic income is exactly that - just enough money to pay for necessities like food and rent. Hence order to be able to afford anything else, people do need to seek out some form of employment. However, the logic is that since the core needs are covered, they will gravitate toward careers that are more fulfilling than ones that merely help pay the bills. This eventually results in a happier, more content society.
For its basic income program test which starts in January 2016, Utrecht officials plan to select 300 welfare recipients and divide them into six groups of 50 each. The control group will continue with the current regulations with its requirements around job-seeking and qualifying income. Three other groups will have to "earn" their money through a different system of incentives and rewards. And then there will the chosen 50 who will receive an unconditional monthly basic income stipend of between $900 (for an adult) to $1,450 (couple or family). Members of all groups will be monitored carefully and the results, evaluated at the end of the year.
The idea of basic income is not new. Over the years, the experiments have been tried in countries around the world, from India to Uganda. One of the most famous such trials was conducted in the town of Dauphin in Manitoba, Canada. From 1974 to 1979, the Minicome project provided a stipend, of varying amounts depending on individual income, to the town's entire population.
According to skeptics, the program was a failure given that the number of hours worked dropped dramatically. However, University of Manitoba economist Evelyn L. Forget who studied the experiment in detail, begs to differ. She says the loss of working hours can be attributed to the fact that the basic income allowed youngsters to continue studying and mothers to take longer maternity breaks to tend to their newborns. An unexpected benefit? The rate of hospital visits especially for mental-health-related complaints dropped dramatically! Unfortunately, the program was stopped before a full evaluation of its long-term impact could be made.
Though the Netherlands experiment is slightly different in that it is reserved only for those on welfare, its results may finally appease skeptics who believe that that unconditional basic income results in an unmotivated population . . . Or, it could just prove them right! So stay tuned!
Resources: qz.com, dutchnews.nl,zmescience.com