Twenty Dutch cities are making an unconventional attempt to combat poverty. Officials in these municipalities are rolling out a program to provide equal monthly payments to small groups of citizens, no questions asked. The capital grants are a form of “basic income” meant to provide a measure of financial security that frees people from the worries of survival and allows them to follow their dreams. The radical concept will be rolled out on a date yet to be determined to a small number of claimants in hopes they can escape the ‘poverty trap’ and contribute to a more prosperous society.
The payments in Utrecht, one of the largest cities in the Netherlands, will equal £660 or $978 per month. Those funds will be issued without any means testing, allowing recipients to use the money however they wish. Recipients of the grants will have the option to work – either part- or full-time – without having the amount of their grant reduced based on the income they earn. Currently, many benefits claimants receive subsidies, only to lose some or all of that assistance when they gain employment. Those jobs tend to end after just a short stint, forcing people to return to subsidized forms of income and trapping them in an endless loop. It’s hoped that, by freeing people from the vicious cycle of ill-suited jobs, long-term employment figures could improve once basic needs are covered.
The experiment will be analyzed by economist Loek Groot, a professor at the University of Utrecht. Understandably, the program is being met with mixed reactions, despite the fact that a “citizen’s wage,” as it is known by the Greens, has long been party policy. Funding a guaranteed basic income is tricky, but advocates argue that it will drastically reduce bureaucracy of welfare programs, making them easier to administrate.
These monthly grant payments are also known as ‘guaranteed income’ or ‘universal income.’ The concept was originally proposed by English-American revolutionary Thomas Paine as a means to equalize opportunity, and it’s likely to be a hot topic around the globe in 2016. A similar experiment is already underway in Germany, where a very small test group – just 26 people – are being paid the equivalent of $1,100 per month with no strings attached. In Finland, a proposal to pay out $870 a month in universal income is on the table and a decision is expected in November 2016.
The concept has also been kicked around in the Canadian city of Kingston as well other small nations around the planet. As these small experiments unfold, time will tell whether free money encourages people to find their bliss, or simply funds the binge-watching of Jessica Jones on Netflix.