That isn't work. That's subsidized pseudo-work in the Roosevelt New Deal tradition. Some poor schmuck has to pour pennies in the top hopper, and gets nothing for his pains.
The basic argument is very similar to yours: replacing the existing rat's nest of situation-dependent welfare benefits with a flat sum that's paid out to everyone would be possible within the same budget constraints because it would eliminate so much administrative overhead and incentives to game the system, while freeing people to do something more useful with their time than filling out unemployment forms.
Of course the difference is that nobody would be required to crank a machine; everyone would simply get 300-400 euros from the government each month just for being alive. (Those who are employed would pay it back in taxes.)
So it's not impossible to live with that kind of money in Finland, even though it's not enough to rent an apartment in the center of Helsinki. You're probably going to be eating a lot of potatoes or pasta...
The political reasoning is not really that "citizen wage" should be good enough for most people, but rather that it would be unaffected by any additional income. Currently there's really no incentive to get a job that only pays 1000 eur/month: you can get that much by pretending that you're looking for work, and those benefits would be lost if you started working. With citizen wage, you could reach that 1000 eur/month income by getting a 600 eur/month job.
Finland has a major problem with persistent unemployment. It's hoped that these low-skilled workers would become more employable under the citizen wage scheme as they would have the financial motivation to seek low-wage and part-time jobs.
In the east you can live a comfortable student's live on this. Though you would be hard pressed to afford rent in Frankfurt or Munich, I guess. (Perhaps you can make it work by sharing a flat with 4 people, or living far out of town.)
I am all for citizen's wage. (Or basic income. Whatever you call it.) We decided to have these levels of welfare in western Europe anyway. So we can get rid of a lot of administrative overhead and breaks of privacy. Of course average earner will have to pay exactly that basic income back in taxes. (Plus other expenses of the state that don't go into basic income.)
This would make the ramen-eating phase of doing a startup much easier, and the same for any creative endeavour that can be done cheaply but takes time. I wonder if there would be an explosion of art?
Unlike with regular welfare, there's a clear feedback loop between the amount of freebie, the number of people "retiring", and the extra tax burden placed on the people still working. At some level of income, this freebie would make working unattractive enough the system would collapse for lack of taxpayers. So there is going to be a continuous fight to keep the level at a sufficient pain point, versus humanitarians who point to the suffering this will cause.
There's an interesting suggestion by some landreformers of the late 19th / early 20th century. They say that the rent from land comes ultimately from the population density, so all land should be owned by community, but leased out to the highest bidder. The proceeds would be distributed equally to all. (Alternatively you can just have a high tax on real estate, that gets redistributed. Make it say, 10% of the value of the land anually. Owners get to announce the value of their land themself, but will have to sell their land at this value to any party, to avoid them setting too low a price. Of course the value of the land will be changed by the tax.)
The absurdity of the example is intended to illustrate the absurdity of doing nothing. The point of the analogy is to recognize that creating money to accomplish socially useful tasks is better than either burying money in mine shafts or expecting the private market to deflate or dig up more gold. This is what monetarism is supposed to accomplish by lowering interest rates and why Milton Friedman famously stated that "we are all Keynesians now."
If it were a practical objection with the pennies I suppose one could answer it by adding another slot that converted 95 pennies into single dollar bills every five minutes. :)
Reference: http://www.auburn.edu/~garriro/fm2friedman.htm
Nixon also said something like this, but he was paraphrasing Friedman.