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Germany has launched a social experiment: an unconditional basic income of 1,200 euros per month. The objective: to understand if with this money people will live better. Will they become calmer and bolder? Or lazier?
The interest is enormous: in just one week, more than 1.5 million people have applied to participate in the Unconditional Basic Income pilot project. However, only 1,500 of the applicants will be included. And only 120 of them will be lucky enough to receive 1,200 euros a month for three years. The remaining 1,380 participants will be included in the so-called comparison basis.
The amount of 1200 EUR is not taxed and is not subject to complicated rules. The only conditions to participate in the experiment are: candidates must be 18 years old, live in Germany and within three years answer the questions of a total of seven surveys, each of which will take about 25 minutes. If they do not participate in the surveys, the money will not be paid. The income, social status or educational level of the participants do not play any role.
During the three years, each participant in the social experiment will receive a total of 43,200 euros, that is. € 14,400 per year. This amount was not chosen at random. It slightly exceeds the poverty line set by the Federal Statistical Office, which amounts to 13,600 euros per year. The project is financed by a crowdfunding campaign. The funds necessary for the payment of the sums will be provided by donations from about 150,000 people.
Will we live better like this?
If all citizens receive a certain amount of money per month without conditions, many of their problems will be solved. The initiators of the project of the non-profit association “My Basic Income” are convinced of this. When they don’t constantly think about how to earn money to survive, people will become freer, more creative and happier, according to the association.
But will this be proven in practice? This is exactly the purpose of the experiment: to answer this question. “We want to know what people will do with this money. Will they spend it or save it? Will they stop working or reduce their working hours? Will they become more social, donate more to the people in,” said study leader Jürgen Schup of the German Institute for Economic Research. “Based on the tests, we can find out something else: if the stress has decreased, if thanks to the unconditional basic income people have calmed down,” says Shup.
In Germany, the unconditional basic income debate has been going on for years and has ideological overtones. In essence, there is the question of what people would do if they didn’t have to work. Many opponents of the idea consider it a utopia of left-wing dreamers who want to be lazy behind the back of society. However, its supporters see it as a solution to many of today’s and future problems. They are convinced that the basic income will improve the social environment: people will have more time to raise their children, to care for the sick and elderly relatives, for mutual assistance. Furthermore, they believe that models can be developed for the future when, with the advancement of digitization and automation, traditional jobs become increasingly scarce.
Jürgen Schup hopes the experiment will answer other important questions. For example, this one: How will this affect people’s innovation and entrepreneurship? “It’s possible that when people get a basic income, they will become bolder and go into self-employment or change something in their profession,” he says.
What answers will we not learn?
However, the experiment will not answer a number of important questions. For example: Where will the prices go when everyone receives an unconditional basic income? Will the sick and needy then have less money than they do now? And how much will taxes have to be increased to finance the company?
“Our research will not solve a series of questions related to basic income. But it will answer the central question for me: how money changes people,” says Shupp. Critics of the project, however, say that three years is not long enough to draw such conclusions.
Similar experiments have already been carried out in Finland and Canada. The Finnish study was supposed to show how unconditional basic income would affect the labor market, but the results are mixed. In Canada, on the other hand, politics quickly discontinued the publicly funded study, precisely because of the high cost.
Also in Germany there is a lack of political support for unconditional basic income. So far, none of the major parties have supported him. And Labor Minister Hubertus Heil and Finance Minister Olaf Scholz, both from the Social Democratic Party, have already strongly opposed the idea of an unconditional basic income.
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