- Joined
- Jan 2, 2006
- Messages
- 28,174
- Reaction score
- 14,270
- Location
- Boca
- Gender
- Male
- Political Leaning
- Independent
Unemployment benefits already cover basically two years. Since you "work in the financial related industry", please explain how paying people not to work really gives them an incentive to find a job?
The premise behind unemployment insurance is to provide short term support so to minimize the incentive for segments of the labor market to become underemployed. People with MBA's working as janitors might make good press but it provides little if nothing to short or long term labor markets as such a friction impedes upward income mobility. This case of inefficient allocation does however come with income elasticities, meaning as we examine higher and higher income earners, the ability for unemployment insurance to provide an incentive to minimize underemployment falls dramatically. Higher income friction is commonly a market orientated phenomena; severance packages and competition restriction based compensation (paying soon to be former employees not to work for competing firms) work to minimize employment search frictions/mis-allocation.