Unemployment insurance…do you really think it will work?


sylvialimIf like Workers Party Member of Parliament Sylvia Lim, you think an unemployment insurance will work for Singapore, maybe you should think again.

Think about it, wouldn’t it be better for the unemployed to be given opportunities to look for employment or skills upgrading in order to prepare one’s self for the next employment instead of allowing an unemployed rely on an insurance?


There is a certain risk where an individual becomes over-reliant on the payout and chooses to reduce the number of times he or she looks for a job or goes for training.

It’s just unsustainable isn’t it?

On a larger scale, if more people choose to fall back on unemployment insurance and not look for employment opportunities, then the national unemployment rate will increase.

As it is, unionised workers who are retrenched are mostly given retrenchment benefits to tide them through the difficult time and some are given an additional grant to undergo training courses to upgrade themselves in preparation for their next employment.


Just yesterday, MP for Mountbatten Lim Biow Chuan called for the legislation of the retrenchment benefits. He suggested that the law “should compel companies to pay a minimum sum of between three and six months of benefits, depending on the employee’s length of service.

If we concentrate too much on just handing out money to retrenched workers, then it will just look like a welfare system where the retrenched lose the motivation to look for jobs.

Also, if it is to be implemented, who is going to be in charge of it? The government? Would it mean that the insurance will be funded by taxes?

Again, I ask, would that be sustainable in the long-term?

Rather than giving a man a fish every day, won’t it be better if you teach a man to fish?

Similarly, rather than giving a man unemployment insurance payouts, won’t it be better to provide retrenchment benefits which includes a training grant to upgrade himself and find a possibly better employment?



Image Credits: TODAY, Todayonline, mothership.sg.

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Arthur Lee

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  • Most unemployment benefits today, even in western countries, are not generous. As it is funded by universal tax from salaries, the benefits are mainly to provide just subsistence living with some minor adjustments, depending on individual contribution to taxes. E.g. a high-income earner who had been paying more taxes may qualify for slightly higher unemployment payouts and/or for longer time period.

    And most unemployment benefits are for fixed time period — usually 6 months or 1 year. During this period, the unemployed individual must fulfill certain criteria — register at govt job agencies (which is compulsory in the 1st place to start receiving unemployment benefits), must attend interviews arranged by the govt jobs agencies, must attend training sessions if so arranged, and cannot reject more than 2 or 3 job offers relevant to that individual’s education/experience level.

    Most western countries now also impose time bar for unemployment benefits e.g. must be continuously working (and paying taxes) for more than 1 year to qualify for the benefits. This is to prevent serial welfarers i.e. people who simply bum around, work for 1-2 months then get themselves fired and then go on unemployment benefits, then work for another 1-2 months, then get fired, etc etc.

    Many of these countries also disallow certain types of job losses from claiming unemployment benefits e.g. if you resign on your own without any mitigating factor (e.g. serious health issues, proof of harassment at work etc) or if you get fired due to wrongdoing / crime.

    The kind of unemployment benefits that PAP is constantly scaring us about only exists in their orgasmic dreams. It must be in their Freudian psyche that’s why they go 1 better — in designing jobs & employment for themselves that do not ever require need for unemployment benefits.

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