Collecting unemployment benefits is important for a person who lost his or her job. It helps workers get through rough times and let them keep their possessions and their homes. Nevertheless, unemployment benefits can have its drawback and at worst, could create a cycle of welfare that has negative effects on people, businesses and the society as a whole.

One of the disadvantages of this benefit is that it is not free money. It is money you already paid from your previous jobs and given back to you the moment you lose your job. To receive your unemployment benefits, you have to look for a new job everyday and report your searches. The income is smaller than your previous salary. With unemployment benefits, a person experiences loss of pay check, personal identity and could lead to crime, heart illness and mental illness.

For a business during recession, most qualified people can only find a job that offers less than their present unemployment benefit, putting business at a disadvantage since quality workers demand higher salaries. These people often prefer unemployment benefits and business is affected due to the lack of workers. For society, the more people receiving unemployment benefits, the less money in the unemployment insurance account. People with work and pay taxes are burdened by the increased taxation that is mean to cover for those filing for unemployment.

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