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Top 10 Facts About Poverty in Finland
Today, Finland has a reputation for one of the lowest poverty rates in the world, and thousands of Finns live below the poverty level. These top 10 facts about poverty in Finland will help put into perspective the socio-economic issues Finland faces today.

Facts About Poverty in Finland

  1. Finland’s poverty rate is 5.8 percent, based on a 50 percent threshold of the average income from the OECD’s most recent report. In recent years, the at-risk-of-poverty percentage hit its peak in 2008 at 13.9 percent but dropped to 11.7 percent by 2015. Finland’s low poverty rate is right behind Denmark’s and not too far from the other Nordic countries.
  2. In 2016, the National Institute for Health and Welfare (THL) reported approximately 400,000 people — or 8 percent — of the Finnish population live underneath Finland’s minimum budget of 669 euros.
  3. Finland’s welfare system is based on the Nordic model, which emphasizes socio-economic equality. In turn, Finland strives to maintain a financial safety net for its citizens and reduce poverty. Politicians such as Bernie Sanders have used the Nordic model as an example to propose solutions to inequality in the U.S.
  4. Finns hold an unusually high amount of trust in each other, and tend to be more willing to pay high taxes needed for the nation’s welfare system. According to a recent Eurobarometer study, more than 80 percent of Finns say that they trust other Finns; this percentage is higher than in any other country in Europe.
  5. As of 2014, the child poverty rate in Finland was 3.6 percent. Child poverty tends to be lower in countries that spend a high percentage of their GDP on social programs, so Nordic countries including Finland possess some low poverty rates.
  6. The shortage of affordable housing ails low-income people and the homeless. One of the largest contributing factors to poverty in Finland is expensive housing costs, especially in urban areas. However, programs like Housing First help ensure that Finns have someplace to live, even at their lowest, most desperate moments. The program is funded by the government and has housed previously homeless Finns for extended periods of time.
  7. Low-income individuals and families have trouble accessing proper social and health services because of growing customer fees. Finland spends 8.6 percent of its GDP on healthcare, which is below the OECD average of 8.9 percent.
  8. In recent years, the number of unemployed immigrants has reached between 2 to 5 times more than that of the average Finn. As a result, more than 50 percent of immigrant households in Finland live in poverty. To combat immigrant unemployment rates, the European Investment Fund recently allotted 10 million euros for an experiment by the Ministry of Economic Affairs and Employment that aims to provide skilled labor jobs for 2,500 unemployed immigrants.
  9. In January 2017, Finland became one of the first countries to start a universal basic income (UBI) experiment. Each month, they gave a stipend of approximately $680 to 2,000 unemployed people living below the poverty level. In theory, the experiment poses a potential solution to eliminating poverty within the country by providing enough money for each citizen to live frugally — regardless of social class. The experiment is set to end in December 2018, and the results of the experiment have not yet been released.
  10. In line with the Europe 2020 Strategy, Finland aims to lower the number of people living in poverty or social exclusion to 770,000 by 2020. According to Statistics Finland, currently 849,000 people live in poverty or social exclusion.

Poverty & Perseverance

Even with Finland’s success combatting poverty in comparison to other world powers, any trend of rising poverty or other negative living conditions within a nation is a continued concern. Finland will continue to experiment with other social programs for the financial security of its people, and hopefully the number of unemployed and impoverished will continue to decrease as a result of these efforts.

– Jessica Reyes
Photo: Flickr

Income_Africa
The idea that guaranteed basic income can solve poverty was first proposed by lawyer Thomas More in the 16th century. Guaranteed basic income, also known as universal basic income is an unconditional periodic money transfer to ensure that a citizen can pay for his or her basic necessities no matter what. The idea that everybody will be paid money every month, whether or not they have a job, is undeniably radical.

Guaranteed Basic Income Has Supporters and Detractors

Economists are divided into two groups over the idea: one in favor of guaranteed basic income and the other against it. Those opposing the idea believe that it will undermine the incentive to do a job, that more people would end up in low-wage jobs or that a “handout” is by no means a tool to “turn things around”. Some of them also argue that even if guaranteed basic income can solve poverty, a program like this can be very expensive and hence negatively affect a nation’s economic growth.

On the other hand, the idea has found acceptance among several intellectuals, politicians, historians, economists and entrepreneurs alike. One of them is Facebook CEO Mark Zuckerburg, who has called for others to embrace the idea, in case people start losing their jobs to automation and artificial intelligence.

Current Studies Testing the Efficacy of Basic Income

To see how guaranteed basic income can solve poverty, many experiments are underway around the world. A nonprofit organization in Kenya called GiveDirectly has launched one of the most comprehensive economic and social experiments in human history. They will be selecting groups of people who will receive $22 per month for a period of two to 12 years, no strings attached.

To date, the organization has distributed more than $70 million among 80,000 households in Kenya, Rwanda and Uganda. “What’s interesting about basic income is that, coincidentally, it’s a conversation people are having all the way from Silicon Valley, where they are worried about job loss to robots, to some of the poorest countries in the world,” said Paul Niehaus, professor of economics at the University of California San Diego, co-founder of GiveDirectly and a firm believer that guaranteed basic income can solve poverty.

In Finland, the government randomly selected 2,000 unemployed citizens for a one of a kind experiment started at the beginning of 2017. To study how guaranteed basic income can solve poverty, these people will receive €560 every month for two years, tax-free. A key goal of the Finland experiment is to give unemployed people incentive to work by providing them with financial assistance even after they become employed again. Researchers chose the €560 monthly amount because it roughly equals the current level of unemployment benefits.

In a recent interview given to NPR, Stockton, California mayor Michael Tubbs said,” In fact, I think [it] will make people work better and smarter and harder and be able to do things like spending time with their families [be]cause we’re not robots.” Stockton will start a similar experiment by the end of this year.

What Basic Income Can Do for Impoverished People

The proponents of guaranteed basic income caution that the amount paid must be sufficient to be of assistance when misfortune strikes but not large enough to satisfy all of a person’s wants. They also argue that the freedom to start a new business or to say yes to a job that pays little but yields joy, or to say no to a job that pays too little or is demeaning, should not be reserved only for the wealthy.

Historian Rutger Bregman highlights an experiment conducted in India by American psychologists involving Indian sugarcane farmers. These farmers get around 60 percent of their income all at once. Hence, they are relatively rich during one part of the year but poor the rest of the year. The farmers were subjected to an IQ test before and after the harvest. The results showed that farmers gained nine IQ points after the harvest, as the extra money freed up mental resources that were previously concerned with making ends meet.

A similar study conducted between 1974 and 1979 in Dauphin, Canada proved that a guaranteed basic income can solve poverty by making the recipients smarter, healthier and richer. Further studies can bolster the effectiveness of basic income worldwide and could lead to it becoming an important tool in ending global poverty.

– Himja Sethi

Photo: Flickr

Top Developments in the India- Pakistan Conflict: Terrorism, Education, and PovertyThe India-Pakistan conflict dates back to 1947, when both countries gained independence from the British. Yet after more than 60 years of tumultuous coexistence, war and poverty are still imperiling the lives of many, especially in the India administered region of Kashmir and the bordering regions of Pakistan. With a slew of periodic terror activities by many separatist groups like Lashkar-e-Taiba and Jaish-e-Mohammad, the lives of many hang in the balance.

The killing of activist Burhan Wani in 2016 has been the main catalyst for the recent surge of violence in the Kashmir Valley. Srinagar, the capital, has been pervaded by unrest, protests and demonstration ever since. Millions of people in war-torn areas of the region live below the poverty line due to the recent surge in hostilities, especially in the Line of Control areas, India’s de facto border with Pakistan.

Since 1989, over 60,000 people have been killed due to violent armed rebellion in Kashmir. Nearly 10,000 people have disappeared and have not been accounted for. Over 45 percent of children under five are malnourished in Pakistan. Human rights violations and the oppression of minorities are rampant, and innocent civilians continue to get caught in the crossfire.

 

Learn about poverty in Pakistan

 

According to the Indian Ministry of Labor and Employment, Kashmir has 105 unemployed individuals per 1,000 people, the highest unemployment rate in recent years. The level of unemployment is impoverishing many individuals, creating more social divisions and aggravating tensions between families. With rising unemployment, small-scale industries like handicraft and embroidery are rapidly on the decline.

Education in the region has been gravely affected by the escalating India-Pakistan conflict. Many children in Kashmir have been denied primary education and social safety nets due to their circumstances. They often have to work in unorganized sectors for a living to support their families.

During her speech at the United Nations General Assembly, Indian Foreign Minister Sushma Swaraj stressed the importance of the empowerment of the poor in alleviating the effects of the India-Pakistan conflict. The socioeconomic status of people living in disputed areas has been steadily declining.

To combat these issues, the regional government is setting up juvenile homes to rehabilitate children impacted by the conflict and those affected by drug abuse, psychological trauma and other issues. Mental health issues such as PTSD, anxiety disorders and depression are quite prevalent in Kashmir, and these homes will help provide treatment.

Despite the India-Pakistan conflict, Kashmir has become the first state in the country to commit to a universal basic income to raise incomes and protect the poorest in the state. The cost of delivering welfare schemes is also decreasing.

India will only resume talks with Pakistan on easing the conflict if cross-border terrorism is halted. Not only will this help open dialogue between the two nations, but it will also help address humanitarian aid, resettlement and restoration. Like the Afghan conflict, the India-Pakistan conflict must be tackled through a regional approach and comprehensive bilateral discussions.

Shivani Ekkanath

Photo: Flickr

Universal Basic IncomeTension-fraught Jammu and Kashmir (J&K) is laying plans to provide a Universal Basic Income (UBI) to all its residents living Below the Poverty Line (BPL). This plan is the first instance of an Indian state committing to a UBI policy.

Jammu and Kashmir’s State Finance Minister Haseeb Drabu proclaims that a UBI will prevent wastage of monetary funds. In a January 2017 budget presentation, Drabu announced that the J&K would use direct benefit transfers. This means that the government deposits money directly into individual bank accounts.

Economic experts have for long endorsed a UBI. According to Pranab Bardhan, emeritus professor of economics at the University of California at Berkeley, Below the Poverty Line (BPL) lists in most Indian states exclude persons legally designated as poor, while numerous well-off families succeed in bribing their way onto the lists.

In Jammu and Kashmir, where geopolitical turmoil wreaks havoc on the economy and the public’s standard of living, UBI systems could tackle poverty. The J&K has a poverty rate of 21.63 percent. Additionally, the unemployment rate among young people is an alarming 24.6 percent.

In 2011, the Self-Employed Women’s Association (SEWA), in a project funded by the United Nations Children’s Fund (UNICEF), launched pilot studies of the effectiveness of such UBI grants in India. Several results stood out:

  1. Recipients often used the money to improve their housing, latrines, walls and roofs. Additional funds were employed to take precautions against malaria.
  2. Nutrition has advanced: the average weight-for-age of young children increased, particularly among girls.
  3. Diets also improved, as commerce shifted from ration shops to markets. More fresh fruits and vegetables consequently became affordable.
  4. Improved health led to superior rates in school attendance and performance.

The SEWA/UNICEF trial yielded greater benefits for working class families, women, and persons with disabilities. Universal Basic Income helps reduce debt and renders less likely the need to go into more significant debt. Individuals reduced the need to borrow money for short-term purposes.

UBI will replace several current welfare schemes, compelling cooperation between the central Indian government and Jammu and Kashmir. Aside from lowering the cost of delivering social programs, Drabu declares UBI plans will deter leakages that plague many current social programs. Existing policies have left over 350 million people mired in poverty, even after two decades of high economic growth.

Universal Basic Income in Jammu and Kashmir will replace several current welfare schemes, necessitating cooperation between the central Indian government and J&K. In addition to reducing the expense of delivering the social projects, Drabu maintains UBI will deter leakages that plague many current social programs.

Heather Hopkins

Photo: Flickr


According to a United Nations (U.N.) report, inequality is rising in both developed and developing countries. Many people lack access to basic healthcare, clean water and food. For example, the U.S. has the largest economy in the world yet ranks second in income inequality out of the 32 developed countries indexed by the Organization for Economic Co-operation and Development (OECD).

It is apparent that poverty, inequality and access to healthcare are transnational issues that know no boundaries. Each year, more and more jobs become automated. Artificial intelligence is taking the place of blue-collar jobs all over the world. A 2013 Oxford study estimates that 47 percent of U.S. jobs will be taken over by robots, automated technology and artificial intelligence within the next 10 to 20 years. The World Bank states that the shift will be even more drastic in developing countries. This is because almost two-thirds of jobs are at risk of being replaced by automation.

Some of the world’s brightest minds believe that the culmination of rising inequality, poverty and workforce automation will inevitably draw humanity toward a universal basic income.

“I think that from a human decency standard there’s a lot of sense to the idea that everybody in a society should be able to meet their basic needs,” says Jeffrey Sachs, economist and director at the Earth Institute at Columbia University.

Another expert, Elon Musk, says that “there is a pretty good chance we end up with a universal basic income, or something like that, due to automation.”

When the Basic Income Grant Pilot Project (BIG) was trialed in India, results showed that recipient households were three times more likely to start a new business than others. In Namibia, crime rates dropped by 36 percent despite an influx of immigration after BIG was implemented. “When you have a safety-net people will take more risks,” says Martin Ford, author of Rise of the Robots. Human ingenuity is restricted in a system that forces people to work low-level jobs to pay for their existence. Universal basic income ensures that everyone reaches the first rung of Maslow’s Hierarchy of Needs, ensuring that basic needs are met. This will drastically improve the quality of life on Earth in developed and developing countries alike. This generation could actually live to see the end of poverty on Earth.

The only way that a phenomenon like this could come to fruition is if the cost of not moving to a universal basic income becomes greater than doing nothing. As more humans are phased out of work by robots, the cost of welfare will extrapolate until it is necessary to switch to a universal basic income.

Josh Ward

Photo: Flickr

Poverty in India
When India gained independence in 1947, around 70 percent of the population lived in poverty. By 2012, this statistic decreased to only 22 percent. However, as the second-largest population in the world — more than 1.3 billion people — 22 percent means hundreds of millions of people are struggling with poverty in India.

In order to alleviate this, India is considering a Universal Basic Income (UBI), which involves a government making payments to its citizens no matter their employment status.

India’s annual Economic Survey proposed giving 7,620 rupees per year to citizens, which translates to about $113 USD. While this idea may appear radical, the report argues differently. Thus far, other welfare strategies have hit dead-ends: rather than bring people out of poverty, people felt excluded while misallocations and leakages plagued the welfare system. Because of this, the idea of a UBI has been met with surprising enthusiasm.

What are the positives of UBI?

According to India’s Economic Survey, there are many. To name a few:

  1.  Poverty in India will be reduced quickly and at once.
  2.  Those excluded in the past — particularly the poor and women — will be given agency. With consistent cash flow, each individual will also be given inherent choices on how to use this money.
  3.  New avenues can be created within the job market. Those trapped in poverty can venture into better working conditions due to a stable cash flow.

In summary, UBI promotes liberty, equality, and productivity.

What are the negatives?

  1.  A UBI may reduce work-incentive.
  2.  There is no guarantee on how the money will be spent: some may waste it on frivolous expenses.
  3.  A UBI may place too much stress on banking systems.

In summary, a UBI may remove the motivation to work and prove to be too expensive. Regardless, UBI will not be implemented any time soon, if at all.

The coordinator of the India Network for Basic Income, Sarath Davala, believes the government will not use the UBI model outright, but a modified version of it. For example, he said a greater likelihood would be “cash payments to the poorest 10 percent of the country first and then to 40 percent.” The universal aspect of UBI, then, may not result in being so universal.

Advocates, however, remain hopeful. As a test-run in 2011, a UBI was given to every man, woman, and child in eight villages in Madhya Pradesh for 18 months. When results came in, nutrition and healthcare among children had improved dramatically, along with school attendance and performance. Not only this, but the freedom to make decisions was more significant than the money itself. As the Economic Survey pointed out, when people carry personal finances, they also carry personal choice.

What the government will decide remains to be seen, but a UBI may very well lead to the eradication of poverty in India.

Brenna Yowell

Photo: Flickr

India_Income
On Nov. 8, 2016, financial assets in India faced the possibility of losing their values completely. This potential instability, along with the ongoing failures of India’s current welfare programs, has pushed the government to consider alternative methods for economic stability. Thus, the government introduced the idea of a universal basic income (UBI).

By replacing India’s current welfare programs with a universal income, families, rich or poor, could receive monthly stipends of equal amounts. The economic survey conducted on a UBI plan proposes a monthly stipend of 893 rupees ($13) per month, amounting to 7,620 rupees ($112) per person each year.

Founding member of the Basic Income Earth Network, Guy Standing, has celebrated the potential positive outcomes from a UBI system, including debt reduction and women’s empowerment. Proponents of UBI hope to see the poor become more self-sufficient and to see social justice promoted.

Faced with corruption and the disproportionate allocation of funds, experts argue that India’s current welfare programs are indignant toward the country’s poor and give them no means of financial control. Transitioning away from such welfare programs would free up 950 existing welfare schemes that could fund a universal basic income plan. Overall, a universal basic income could reduce absolute poverty in India by 21.5%.

Currently, India has limited access to ATMs, and a third of Indian adults do not use financial institutions to manage their funds. The direct depositing of funds could encourage the use of formal financial services and could help improve financial infrastructure in India.

Given the recognizable need for reform in India’s welfare programs, current statistics reflect issues that need resolving before establishing a universal basic income. For example, access to a UBI program would only be available for 75% of the population, creating quite an expense that would account for 4.9% of India’s GDP. Limited access also leads to the question of fairness. Would the wealthy still collect from a UBI program and leave some in extreme poverty without access, or would the rich honorably opt-out as beneficiaries to a program for which they have no need? These dilemmas make the debate on a universal basic income more complex.

The question to consider going forward is: what will be the most efficient way to replace India’s current welfare system? According to India’s Chief Economic Advisor, Arvind Subramanian, there is much to consider in implementing a universal basic income. However, the good news remains that efforts are being made to alleviate the people of India from poverty through a potential plan for a universal basic income.

Amy Williams

Photo: Flickr