unemployment insurance

Examples of unemployment insurance in the following topics:

• Social Insurance

  • In the United States, Social Security, Medicare, and unemployment insurance are among the most well-known forms of social insurance.
  • Unemployment insurance provides a monetary benefit to workers who have become unemployed through no fault of their own.
  • FUTA covers the costs of administering the Unemployment Insurance and Job Service programs in all states.
  • In addition, FUTA pays one-half of the cost of extended unemployment benefits (during periods of high unemployment) and provides for a fund from which states may borrow, if necessary, to pay benefits.
  • Social Security is one of the best-known social insurance programs in the United States.

• Pensions and Unemployment Insurance

  • Another federal agency, the Pension Benefit Guaranty Corporation, insures retiree benefits under traditional private pensions; a series of laws enacted in the 1980s and 1990s boosted premium payments for this insurance and stiffened requirements holding employers responsible for keeping their plans financially healthy.
  • Unlike Social Security, unemployment insurance, also established by the Social Security Act of 1935, is organized as a federal-state system and provides basic income support for unemployed workers.
  • The amount and duration of the weekly unemployment benefits are based on a worker's prior wages and length of employment.
  • The federal government also assesses an unemployment insurance tax of its own on employers.
  • States must lengthen the duration of benefits when unemployment rises and remains above a set "trigger" level.

• Impact of Public Policy on Unemployment

  • Most governments strive to achieve low levels of unemployment.
  • However, the types of policies differ depending on what type of unemployment they address.
  • Governments can enact policies to try to reduce frictional unemployment.
  • Many governments offer unemployment insurance to both alleviate the short-term hardship faced by the unemployed and to allow workers more time to search for a job.
  • Review the importance of unemployment benefits in the American social welfare program

• Defining Unemployment

  • It differs from frictional unemployment because it lasts longer.
  • Hidden: the unemployment of potential workers that is not taken into account in official unemployment statistics because of how the data is collected.
  • The final measurement is called the rate of unemployment .
  • The effects of unemployment can be broken down into three types:
  • Individuals receive unemployment benefits including insurance, compensation, welfare, and subsidies to aid in retraining.

• Measuring the Unemployment Rate

  • The unemployment rate is measured using two different labor force surveys.
  • The survey measures the unemployment rate based on the ILO definition.
  • The unemployment rate is also calculated using weekly claims reports for unemployed insurance.
  • The unemployment rate is updated on a monthly basis.
  • They calculate different aspects of unemployment.

• Disposable Income

  • For the purposes of calculating the amount of income subject to garnishment, United States federal law defines disposable income as an individual's compensation (including salary, overtime, bonuses, commission, and paid leave) after the deduction of health insurance premiums and any amounts required to be deducted by law.
  • Amounts required to be deducted by law include federal, state, and local taxes, state unemployment and disability taxes, social security taxes, and other garnishments or levies, but does not include such deductions as voluntary retirement contributions and transportation deductions.
  • It is total personal income after subtracting taxes and typical expenses (such as rent or mortgage, utilities, insurance, medical fees, transportation, property maintenance, child support, food and sundries, etc.) needed to maintain a certain standard of living.

• Reasons for Unemployment

  • There are three reasons for unemployment which are categorizes as frictional, structural, and cyclical unemployment.
  • There are four types of unemployment.
  • The natural level of unemployment is the unemployment rate when an economy is operating at full capacity.
  • There is always at least some frictional unemployment in an economy, so the level of involuntary unemployment is properly the unemployment rate minus the rate of frictional unemployment.
  • Over time, unemployment has returned to about 5%, which is the approximate natural rate of unemployment.

• Types of Unemployment: Frictional, Structural, Cyclical

  • Structural unemployment is one of the main types of unemployment within an economic system.
  • It is often impacted by persistent cyclical unemployment.
  • Frictional unemployment is another type of unemployment within an economy.
  • The natural unemployment rate, sometimes called the structural unemployment rate, was developed by Friedman and Phelps in the 1960s.
  • The natural rate of unemployment is a combination of structural and frictional unemployment.

• Defining Full Employment

  • Full employment is defined as an acceptable level of unemployment somewhere above 0%; there is no cyclical or deficient-demand unemployment.
  • Ideal unemployment excludes types of unemployment where labor-market inefficiency is reflected.
  • Ideal unemployment promotes the efficiency of the economy.
  • The full employment unemployment rate is also referred to as "natural" unemployment.
  • Full employment is defined as "ideal" unemployment.

• Typical Lengths of Unemployment

  • Long-term unemployment lasts 27 or more weeks.
  • Generally, unemployment is high during recessions.
  • Short-term unemployment is considered any unemployment period that lasts less than 27 weeks.
  • Long-term unemployment is classified as unemployment that lasts for 27 weeks or longer.
  • Short-term unemployment is considered less than 27 weeks, while long-term unemployment is joblessness that lasts 27 weeks or longer.