As my family congregated in the den with their aural and visual attention perkily tuned to the news reporter, it was once again re-enforced to us as well as to the general public as it has been done everyday, that our economy is slipping out of scale. Then, the falling prices of general stocks would be promptly displayed to back up claims while the reporter continues to ramble on with mock urgency.
“Isn’t it time for us to spend more?” I regarded my mom curiously.
“NO” She said without a moment of hesitation.” We will do that once the government ensures that we get more money”
This has led me to wonder why our government has not ventured into the prospects of Unemployment Compensations. Of course, we already have some Welfare Benefits that only the most needy people can qualify due to their stringent requirements, but the idea of unemployment compensations never seem to get through. The most fundamental idea of Unemployment Compensation revolves around paying the unemployed and getting receipts from the employed; therein, spreading the wealth.
The idealistic concept of Unemployment Compensation is perfect but will definitely be mishandled if ever imposed in our home country. There will be cheers, there will be curses. But most of all, there will be a morass of questions regarding the skewed personal integrity and responsibilities.
Some argues that this form of compensation can actually elevate the economic situation as it does improves spending power of the population, i.e. those who are unemployed gets to spend money as well. When a person becomes unemployed, his ability to spend reduces and thus creates a general contraction in the economy due to the work of Money Multiplier which basically states that a general change in consumption when multiplied by the consumers propensity to save, will cause a relative change to a country’s income. So, if we do provide such people with some form of leeway, the general consumption in the country will increase and in such, the income of the country will also rise.
As valid as the idea sounds, it is also equally questionable.
By providing the Unemployment Compensations, the government is indirectly giving the latent freeloaders a chance to act. In this idealistic concept, those who does not work also gets to spend. For most part, the country would merely be supporting them at the expense of the workforce who works hard for their fair share of rewards, that of which is partially and consistently taxed and sapped by loafers who spend time allegedly ‘looking’ for work.
In the first place, why would they want to look for work when they get money either way? It is true that the amount they will receive is marginally lesser, but even then they have got this benefit to fall back on; They have a baseline to fall on in the worst scenario. This results in casual job searches, picky selections and an over dependence on the Unemployment Compensation. Not the best way for the society to function.
Also, this form of compensation would reduce the employees’ motivation and desperation to stay active and employed in such difficult times. Their worries about wealth and finances would be effaced as even if they are unemployed, this form of benefit can tide them through. This mentality entails a lower productivity and in such, increases the cost of production. Not very profitable for the company.
The amalgamation of this two results will only cause a downwards spiral for the country that could very well be avoided. On a superficial basis, this ideology is impeccable just as communism had sound. However, in practice, especially in a small country like we are in, it is in fact very much detrimental to the economy, the spine of the nation. Unless there is stringent guidelines for this concept, or that the population does respect and adhere to their personal integrity and responsibilities, it is very difficult for this grandiosely idealistic concept to survive the malicious and depraved intents of people to take advantage of this system.
Until we break free from being a society with deviated morals and where every little small gains are throughoutly harvested, Unemployment Compensation just have to be kept on hold.
