Social Insurances and Layoffs

1. SocialInsurances and Layoffs New York Times By: Kaylie Means

2. unemployment insurance • When people are laid off and actively looking for work, they may file for unemployment to help with finances. • Unemployment insurance subsidizes job separations and results in many layoffs and too few people being employed. • Extending unemployment benefits would reduce some workers’ efforts to look for a new job because the higher benefits offered lessens the hardships of being unemployed. • Many unemployed take advantage of the system and continue applying after the insurance claim is up and lie saying they currently look but cannot find a job. These people make it harder on the employer and others employed as they get benefits to support themselves by sitting at home not working.

3. Continuous unemployment claims • This graph shows the continuous growth in claims over ten years. • The greater the benefits offered, the more people rely on those benefits instead of applying for another job.

4. Layoffs • When Employers experience reductions in demand from their customers, as auto manufacturers and homebuilders often do early in a recession, their reaction is to lay off part of their work forces. • This is where the circle begins and the people who are laid off begin to claim unemployment and look for a new job or continuously keep claiming. • Layoffs are also greatly caused through seasonal jobs. If a job is has a slow period, like construction in the winter, they will usually layoff workers until the spring and often offer their laid off employees a job later in the year.

5. Layoffs continued… • A better way is to adapt to changes instead of to layoff employees. Employers could adapt to less demand by work-sharing (an UI program that reduces the hours and employee works a week while unemployment compensation makes up for some of the income differences), reducing prices they charge customers, or reduce wages to allow everyone to keep their jobs.

6. Disability insurance • Disability becomes available when a worker’s health makes it too difficult to remain on the job, or there is a job related injury that causes the worker to no longer be able to work. • This program is funded through a flat-rate payroll tax on employers and employees, this way employers don’t bear the costs from a disabled worker who is unable to work and becomes a beneficiary in the D.I. program. • Disability increases the income employees can receive outside the job and makes employees a greater expense for an employer.

7. Disability continued… • There are millions of reasons for disability claims, but theses are the most common. • Though DI is a great advantage to those in need, it is often misused by workers who claim to have a serious injury just to prosper from the benefits this program has to offer. • During a recession claims are more likely to be denied.