Benefits & Disadvantages of Unemployment Benefits

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Unemployment benefits help individuals and families stay afloat during difficult times. While unemployment benefits can provide a safety net for many, caveats and restrictions also apply. The various benefits and disadvantages associated with unemployment benefits can impact individuals, families and society as a whole.

Benefits

  • The benefits related to unemployment benefits affect everyone directly or indirectly. The aim of the unemployment insurance program is to help families survive periods of unplanned unemployment. Benefits should help individuals and families obtain basic needs, such as food and housing, while searching for new employment. The economy as a whole, and thus society, benefits from unemployment benefits as well. The unemployment benefits paid to the unemployed help keep money flowing to local businesses, creditors and retailers. This cash flow is important on a local and global level.

Restrictions

  • Unemployment insurance benefits programs' strict eligibility criteria represent an advantage of unemployment benefits. Those seeking unemployment benefits must demonstrate that unemployment occurred through no fault of their own, such as in a layoff or plant closing, and must adhere to other guidelines set by the state. These requirements keep those who quit voluntarily or were terminated from collecting benefits and creating a drain on the system. In addition, claimants must routinely answer questions related to their job hunts and any other income each time they file claims. This helps encourage job seekers to continue looking for jobs.

Unemployment Costs

  • Unemployment benefits represent a real cost to employers, the state and the federal government. Employers help fund the program, along with employee contributions in some states, and continue to pay a portion of unemployment insurance premiums for those workers displaced or laid off. States and the federal government may also extend unemployment benefits beyond the traditional six-month time frame during turbulent economic times, further placing a drain on state and federal resources.

Other Considerations

  • Some would argue that unemployment benefits tend to fuel longer periods of unemployment for benefit recipients. While this represents a disadvantage of unemployment benefits, it can also represent an advantage. For instance, a recipient collecting the traditional six months of unemployment benefits may not take the first job he is offered. However, the reason for this may have nothing to do with what some would see as "milking the system". For some, unemployment benefits allow them a sufficient amount of time to find the right position for them. This helps prevent a return to the unemployment line and also helps companies hire and train the right person for the job. This can lead to a reduction in costs over the long-term for corporations.

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