Employment insurance is a social welfare that provides a safety net of temporary financial assistance to individuals who lose their jobs. The welfare system is essential and helpful when companies fail, causing workers being laid off and receiving compensation of payment during the periods in search of new jobs; however, this arises questions on justice and efficiency. To what degree would the employment insurance be overly generous in Canada? Is the welfare system just when the program is at the expense of productive and self-sufficient members towards individuals who abuse it (problem of free riders)? Could the amount of money and resources spent on employment insurance be allocated else where such as healthcare and education that would produce
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How much benefits are adequate for the EI? Who should be eligible to receive it? These are all key elements of the policy. Government programs in Canada such as EI aims to give assistance to citizens since the market does not provide aid itself. These programs aim to help produce higher productivity and growth in economy as labour is an important function for growth. EI’s purpose is to assist citizens to adapt as they are in transition of jobs whether it is due to frictional, structural, or cyclical unemployment in order to produce higher productivity. Moreover, EI could work as a tool of justice to reduce inequality. Makarenko examines “some view unemployment insurance as an important mechanism for promoting social equality, where wealth is redistributed more equally between employers and affluent workers” (n.p.). However, EI could also lead to efficiency issues. Individuals could rely or abuse EI to purposely avoid returning to the labour force when jobs do not meet their expectations either in wages or conditions; or if these jobs require them to move to places where there are labour shortages. “EI reduces the incentive for workers to move from places where employment is seasonal or unstable” (Makarenko n.p.). Moreover, individuals who are out of labour for a while could be having difficulties to integrate back into the workforce as their skills might have worn
How much benefits are adequate for the EI? Who should be eligible to receive it? These are all key elements of the policy. Government programs in Canada such as EI aims to give assistance to citizens since the market does not provide aid itself. These programs aim to help produce higher productivity and growth in economy as labour is an important function for growth. EI’s purpose is to assist citizens to adapt as they are in transition of jobs whether it is due to frictional, structural, or cyclical unemployment in order to produce higher productivity. Moreover, EI could work as a tool of justice to reduce inequality. Makarenko examines “some view unemployment insurance as an important mechanism for promoting social equality, where wealth is redistributed more equally between employers and affluent workers” (n.p.). However, EI could also lead to efficiency issues. Individuals could rely or abuse EI to purposely avoid returning to the labour force when jobs do not meet their expectations either in wages or conditions; or if these jobs require them to move to places where there are labour shortages. “EI reduces the incentive for workers to move from places where employment is seasonal or unstable” (Makarenko n.p.). Moreover, individuals who are out of labour for a while could be having difficulties to integrate back into the workforce as their skills might have worn