Unemployment Insurance: Coping With The Pink Slip

Unemployment Insurance: Coping With The Pink Slip

by

Kirthy

A recent news report by the International Labor Office states that seventy-five per cent of the 150 million people unemployed around the world lack any unemployment insurance protection.

The very thought of loosing a job gives the shivers to workers and the recession in the previous year showed stars to many people during the day. Unemployment insurance are benefits made by the state to unemployed people. They are a part of social security schemes and the sum paid varies depending on whether only basic needs have to be covered or an amount as compared to the previous salary the person was earning has to be given. This benefit is given to those who register themselves as unemployed persons, who are seeking work but currently do not have a job.

This insurance is like a stabilizer for the economy. It reduces its spending when the economy is in good phase, as the number of unemployed workers reduces. Their revenue increases as tax revenues increase, and then these surplus funds can be made use of during recession and layoffs.

In the developed countries, there are two layer benefits of unemployment insurance. The first and most important benefit is the compensation of about 60% of national average earnings, which is paid during the initial period after a loss of job. The second layer of benefit is available only in some countries, which provides that workers who have exhausted the funds provided to them, can be given a grace period till they can look for another social security scheme. There are different terms and conditions for unemployment insurance depending on the state or country in which the worker is working and has registered in the employment exchange.

In developing countries, the concept of unemployment insurance hardly exists and only a fortunate few are covered under this. In America, part-time, temporary or self-employed persons cannot claim for compensation under this insurance.

The main point to be noted here is, the worker should be unemployed for no fault of his. The benefits are based on quarterly earnings. There is also an option is some developed countries where, instead of laying off, employers can reduce the number of working hours for employees. In this case, the workers can receive the claim of the number of hours they used to work before but which have been cut down presently.

Unemployment insurance is an important and useful scheme because money is unarguably the most vital component to sustain life, and since there are several dependants on a single person, loosing a job for no fault of his, can be a nerve-wrecking situation for anyone to deal with. How popular and useful it can be if implemented in developing countries is still debatable, but it is sure to provide a relief to thousands of people who have been shown the pink slip.

Vijay K Shetty, Expert Author, Platinum status. Get more information on:

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