When I quit my job in mid-2022, I had no idea what was going to happen, and I was anxious about how I'm going to support myself during the period that I would be unemployed and looking for a job. That whole situation was exacerbated by the fact that I'm living abroad and would also have to deal with the ramifications of being unemployed while applying for a residence visa.
Now, it would have been a relief if I had some financial support from the government as I ventured into the unknown in search for another job. However, I was pretty much left to fend against the world all on my own, and that took a lot of hoping and searching to get through, but in the end, I was able to find another job that fit my needs at the time, and so, I didn't have to burrow through my savings too much.
I also had the option of having my folks back at home to wire me some of my money just so that I could survive for a couple more weeks, but thankfully, I didn't need to resort to that option. My case is a bit different than those in the US, since the US has what is called "unemployment insurance" or UI, which can be summarized as financial aid or support for those who got laid off of their jobs.
Focusing on the part where it only applies to people who were laid off, that meant that people who voluntarily quit aren't eligible. Thus, it forces people who may be working in low-wage jobs to continue working at their less-than-ideal job just so that they don't have to face the brutal reality of the current job market.
Despite this, a handful of economists are suggesting that perhaps they need to revisit the UI system, which they think requires a major overhaul, one in which people who voluntarily quit their jobs would be able to apply for UI and receive the benefits. That seems a bit counterintuitive to the ethos of the program itself, but some economists have argued that giving people the incentive to quit their jobs will actually be beneficial to the economy as a whole as it helps in the efficient matchmaking of workers to jobs.
I'm not really an economist so I won't be able to explain the nitty-gritty details of the concept, but in essence, the reason behind this idea is the assumption that there are many people who are mismatched to their jobs, or basically have awful jobs and whose skills are being under-utilized. But since it would be more disadvantageous for them to quit and try to look for another job, they just endure and stay at their current jobs.
This also assumes that these people will go on a search for better employment when they do quit, and that they're not simply taking advantage of the unemployment benefits out of laziness. In theory, the idea makes sense. You're giving individuals a sort of safety net that would allow them to look for better, higher-paying jobs that match their skillset which should make the economy better off as a whole.
You might ask whether this is what would happen in reality. Well, the pandemic actually gave us an avenue to test that theory out, as many people were either laid off or quit their jobs voluntarily, and were given increased UI benefits. With the dataset provided by the unique circumstance of the pandemic, it showed that, despite the moral hazard of giving people financial aid for quitting their jobs or being unemployed, studies found no connection between the boosted UI and laziness or joblessness.
The truth of the matter is people want to work and given the stress and pressure being heaped upon them by the hard-pressed economy at the moment, they don't see being unemployed as an option. People will continue to look for work, but what they need is the kind of work that fits their skills, their goals and career path, and their threshold for satisfaction.
Now, even the country I lived in for four years had that kind of program. I knew someone who became a naturalized citizen, and after she became unemployed, the government sent her support every month for the next six months while she was looking for a more stable job. And it didn't diminish her desire to look for a job, rather, it pushed her even more to find employment. Given, she was a single mother of two, whose children were already going to college.
Of course, we cannot haphazardly overhaul the entire system simply because it's outdated. We still need to identify the proper eligibility criteria and closely monitor whether the unemployed are actually looking for jobs, but in a capitalistic system, people should be given the freedom to choose what they think would be better for them. The whole idea of capitalism is predicated on allowing individuals to let their preferences dictate where the market should go. And so, stifling that freedom makes the market less efficient.
Should people who quit their jobs be given an incentive? It's a complex issue but one in which these alternative perspectives should not be ignored.
(Image credit: Saulo Mohana/Unsplash)
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