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Why government should think of unemployment insurance benefits assistance during this pandemic

By Sunday Makiri | July 13th 2020

With the Covid-19 pummeling, the government should create unemployment benefits insurance for the unemployed to maintain the social and economic services to its populace as part of its economic stimulus.

The unemployment benefits or compensations are paid funds by compulsory government insurance to the individual citizen. Depending on the jurisdiction and the person's status, those sums may be small, covering only basic needs, or may compensate the lost time proportionally to the previous earned salary.

Unemployment benefits are generally given only to those registering as unemployed, and often on conditions ensuring that they seek work and do not currently have a job.

Census data released this year shows that at least 39 percent of the young Kenyans are jobless; this has contributed significantly to the widening gap on the social status between the rich and the poor.

The figure is set to rise in the wake of Covid-19, which has tumultuously affected the country's economy. Therefore, it is desirable that the government in-cooperate a provision in law for unemployment benefits soon.

The employment benefits would augment the income of very low-income households to help keep them out of poverty. Unemployment benefits provide additional support to workers during recessions, without sizeable adverse side effects. Furthermore, this universal basic income is to cushion those in the lowest strata and abyss, which can be a stimulus check for everyone in hard times. For those self-employed and run their own business, tax incentives programs can be inaugurated in local businesses. The essential needs can be provided from taxes levied.

Some countries for instance Europe, that have adopted this system, have seen a change as the percentage of unemployed individuals. The unemployed benefited from the program and were able to acquire jobs through state assistance. Their numbers dropped to 2.3 percent, with 74 percent of its people aged 24 to 55 in the workforce.

The National Employment Authority established under act of 2016 registers persons seeking employment and maintains an integrated and up-to-date database of all persons seeking employment, but part its functions can almost be termed as non-functioning as its programs are yet to benefit the many who are unemployed.

Lack of this incentive will cost the society as elevated crime will make sense, because of the absence of a wage-paying job, people may turn to crime to meet their economic needs. Moreover, the lack of income created by unemployment can force families to deny educational opportunities to their children and deprive the economy of those future skills, which will cause erosion of certain skills in the job market. When unemployment is high, especially during this great recession, the country will often look to replenish her coffers by increasing taxation on businesses—counter-intuitively discouraging companies and institutions from hiring more workers after this pandemic.

Bottom line, the costs of unemployment go far beyond the accumulated sums handed out as unemployment insurance benefits.

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