What Are the Benefits of Unemployment?
To an individual employee, unemployment is basically a tragedy that should be rectified by the government. However, to an economist, unemployment is an essential necessity. In fact, a certain unemployment rate is vital for maintaining a good economy. The following article discusses the advantages of unemployment.
1. Reallocation of resources
The main advantage linked to unemployment is the fact that it encourages unemployed workers to re-distribute resources. Usually, without any major shakeups, people continue using resources, such as the labor force, in the same manner as they did some time ago, even though there might be better sectors to employ workers in. Unemployment therefore forces individuals to really examine the way important resources like time and money are being spent. It enables the redistribution of employees to various parts within the workforce.
2. Better planning
Unemployment promotes better planning in the unemployed workers. Most of these unemployed workers usually examine their habits of spending to ensure that they save the most money. For that reason, they may stop paying for both services and goods that they no long require using such as magazine subscriptions and club memberships. In addition, unemployment causes workers to go back to school for further studies. This property benefits the economy as it increases the worker’s value.
3. Boosts self-employment
Typically, the unemployed individuals opt to create new jobs and begin working on their own. This action is very useful as it leads to the creation of new businesses and companies that would otherwise not exist if the creator or owner had continued working for another person. Enhancing self-employment offers a good economic benefit, especially if it results in the creation of new jobs.
Unemployment has various disadvantages also. Without a source of regular income, consumers and workers have little money for spending on services, goods and also for paying taxes. They usually depend on government benefits such as food stamps for survival.