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Leonid Bershidsky

A Basic Income Is Smarter Than a Minimum Wage

Governments brave enough to try basic income may be able to abandon labor  market regulation.
A way in from the cold.

A way in from the cold.

Photographer: Michael Gottschalk/AFP/Getty Images

Just as the U.K. raises its minimum wage and as Bernie Sanders's demands for a 50 percent increase in minimum pay keep winning him votes in the U.S., some politicians in one of the world's most socialist countries, Sweden, are in favor of going in the opposite direction. They could be right, especially if nations can find a way to unhitch basic subsistence from work.

Sweden, along with some other countries with big social safety nets -- Denmark, Norway, Switzerland -- doesn't have a legally mandated minimum wage. Instead, the minimum salary is collectively bargained. The country's strong unions and socially responsible employers make sure that, at 20,000 kronor ($2,468) per month, it reaches about 64 percent of the average wage -- more than twice the U.S. rate. Now, though, three opposition parties in the Swedish parliament are in favor of legislating to lower it as a way to adjust for the arrival of an army of immigrants with relatively low skills.