The Pros and Cons of Unemployment Assistance and Why it Matters in the Present Times

What is Unemployment Assistance and Why it Matters in the Present Times

World over, there are many countries that provide what is known as Unemployment Assistance which is essentially a monetary payout to those who are laid off from their jobs.

Otherwise known as Dole, Unemployment Assistance helps those workers and professionals who are out of a job with the necessary means to keep them afloat until the time they are rehired.

By giving out money to the unemployed, nations make sure that such individuals do not go hungry or are evicted from their homes due to their inability to pay rent.

With the recent humungous increase in the numbers of the unemployed due to the Pandemic, Dole has taken on a life of its own and has been the lifeline that keeps those without jobs fed and housed.

Indeed, Unemployment Assistance matters more than ever as we are in the midst of an unprecedented emergency and hence, governments must do whatever it takes to help those hit hardest by the crisis.

Of course, there are some downsides to Unemployment Assistance as well as it disincentivizes the unemployed from returning to paid employment and seeking fulltime jobs.

How the Free Market Capitalist West Needs a Social Safety Net for its Workers

Before we discuss the downsides of the Dole, let us look at why the Pros outnumber the cons s far as unemployment assistance is concerned.

In the West, the concept of a Social Safety Net has gained traction since the Free Market Capitalist Societies encourage employers to hire and fire at will and at the same time, ensure that workers are taken care off during downturns.

In other words, the nature of the system in the West is such that there is a Compact or an understanding that firms can hire during the booms and fire workers during the busts thereby ensuring their survival and competitiveness.

In such a system, there has to be a mechanism through which such workers are compensated for the natural and cyclical nature of capitalism with its attendant ups and downs and hence, the concept of Unemployment Assistance came into play.

Moreover, unlike in the East where being laid off is concerned as an affront to one’s self respect and status in society, the Western nations inculcate the notion that being in and out of jobs is natural and endemic to Capitalism.

This is the reason why being on Dole is not considered as demeaning.

Why Unemployment Assistance Must be for a Limited Duration and for Immediate Needs

Having said that, it must be noted that Unemployment Assistance should not be for longer term durations and must be limited to the immediate needs on hand.

In other words, as one of the basic tenets of economics is that there is No Free Lunch; those without jobs must not be encouraged to be on Dole for more time than required and hence, the duration of unemployed assistance must be limited.

Indeed, in the United States, Dole is usually given for a maximum period of Six Months from the time the individual loses his or her job and there are other conditions to be met such as how they must show that they are looking for jobs to be eligible for Dole.

So, in a way, there are many built in safeguards that prevent workers from living on Dole for more time than necessary.

Of course, there are some conditions which also ensure that unemployment benefits can be extended beyond the timeframe that is allowed due to the exigencies of the situation.

Indeed, this is the reason why many Western countries have given their citizens an extra three months on Dole due to the present crisis that is engulfing them.

The Pros and Cons of Unemployment Assistance and Why We Need a New Approach

The reason why there is so much debate about Unemployment Assistance in the last few months is because the present Depression like economic crisis has led to Millions being without jobs and at risk.

Therefore, the moral and the social obligation to help the vulnerable is what are driving the present increases in Dole as well as the fight over providing for more and for longer.

On the other hand, in the United States, many Big and Small Businesses are complaining that the generous nature of the Dole is keeping many workers from returning to employment and hence, ensuring that workers become lazy and too dependent on such assistance.

Indeed, as some are grumbling, how can workers return to jobs that pay lesser than the Unemployment Assistance?

Therefore, any discussion of Unemployment Assistance has to take into account both the Pros and Cons and must arrive at a midpoint which ensures a decent Social Contract and a Compact between the State, Businesses, and Workers.

In other words, what we need is a comprehensive look at both the advantages and disadvantages of Dole by including the interests of all stakeholders.

This is more important now as nations emerge from the crisis.

New Compact for the New Realities

Last, the concept of Unemployment Assistance is a creation of the First Industrial Revolution that spawned the Modern Free Market West and considering that the West is now in the throes of a Fourth Industrial Revolution that is upending the models and the institutions created after the First Industrial Revolution, it can be argued that we need a new model of how societies function in the present times.

To conclude, Unemployment Assistance must be seen in the broader perspective of the relationship between the state, the workers, and the businesses and hence, the pros and cons should be debated accordingly.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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