Essay on Economic

  1. Why is unemployment compensation provided? Who benefits and why?

Unemployment compensation has two objectives: “(1) to provide temporary and partial wage replacement to involuntarily unemployed workers who were recently employed; and (2) to help stabilize the economy during recessions” (Almanac of Policy Issues). This payment should help unemployed to get through an adhesive recession. Both unemployed people and the state government benefit from unemployment compensation. Those who have been unemployed without their own fault get long term insurance and financial support from the government and they are able to search for a job with wages equal to that they used to get working for previous company. Some people use this opportunity to stay away from possible job as longer as compensation period lasts. The government benefits as well because money spent on compensation quickly “re-enters the economy as recipients pay for food, clothing or housing” (Bloomberg). Compensation has been considered as one of the best ways to keep consumer spending from collapsing at the periods of tough unemployment.

2. Why was the benefit period extended?

Benefit period was extended when “the unemployment rate reached 10.2 percent” (Bernard). It was extended because the rate of unemployment remained rather high in some states, while many unemployed have already run out of their unemployed benefits but still have not managed to find a job. The extension program is aimed at unemployed who have been staying out of work for a year or a year and a half. Thus, there was a necessity of the extension to support people who have not found a job within this period.

3. Do you think people are less inclined to accept possible job offers while they are receiving benefits?

In my opinion, people are less inclined to accept possible job offers with lower wages than they used to earn before the unemployment. However, they can accept job offers with higher or equal wage to that they used to have. Most people realize that when they stay out of work for a long time they are at risk of loosing their skills and contacts. Moreover, it will be more difficult for them to return to work again. However, it should be noted that unemployment benefits stimulate people to spend more time in search for a job and decline not perfect but still good job offers.

4. How long should a person wait until s/he accepts the idea that the wages previously earned may no longer be possible and a \”lesser job\” may be necessary?

To my mind, it depends both on a person and job market opportunities. Some people are quick in realizing that the wages previously earned are no longer possible and they are inclined to accept a job offer with lower wages rather quickly.  Some people realize that this measure may be necessary at this particular period of time but they may hope to change their job as soon as the situation in the job market and in the state economy changes. Some people are more ambitious and they are not ready to give up and to take job with lower wages very soon. They may be in search of a job with the wages equal to their previous ones until their benefits period expires or even longer. Some people will think pragmatically and will rely on job market opportunities. If they see that job market is able to offer jobs with worthy wages they will wait. If it is not possible and they have nothing to expect they will accept an offer with lower wages than they used to earn.


5. Do you agree that being out of work for a long period of time decreases a person\’s chances of finding employment? Why or why not?

I partly agree with the statement that being out of work for a long period of time decreases a person’s chances of finding employment. People are inclined to adapt to most situations and to get used to circumstances. Thus, for some people psychological factor of adaptation may matter and may prevent their further employment. People are inclined to retain their ambitions and their desire to find a job for some period of time but then they enter a period of lesser desire of becoming employed. Sometimes they may decline or ignore some job offers unconsciously because he has got used and the problem loses its urgency. It also depends on other circumstances, for example, how much a person is supported by family or friends. It should be noted that it may depend on how important the job was for a person and how much he valued it himself. If it was not very important for him staying away from job for a long time may really decrease his chances of employment as he may feel quite comfortable in the situation.

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