Unemployment benefits effects have turned controversial these days. According to the Social Security Administration, these benefits are income. In a down economy, unemployment compensation changes the incentives of workers who are unemployed, lengthening the search for new work.

Furthermore, unemployment benefits could alter the mentalities of workers that could lead them to be unhappy and less driven due to their dependence on the government. More and more people opt for unemployment insurance than productive employment. When people stay unemployed, the decrease in their spending also slows down production in the whole economy, so the country or state becomes less sustainable.

Moreover, unemployment benefits could create severe long-run effects known as hysteries or long-tern unemployment. A worker who stays unemployed could lead to his or her skills becoming obsolete and the possibility of staying unemployed increases. Employment and production will fall and could result to a workforce with lesser skills.  Unemployment benefits extension could also increase periods of unemployment since unemployed workers would rely on these benefits more. Although unemployment compensation was created to aid workers without a job to survive, they could have an effect that could negatively impact the economy’s productivity and the development of a particular state or country.

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