The unemployment insurance system (UI) in the U.S. was created in 1935. The system helps people who lose their jobs by temporarily replacing part of their wages while they look for work. It “is a form of social insurance, in which taxes collected from employers are paid into the system on behalf of working people to provide them with income support if they lose their jobs.” (Stone) The system also helps the economy continue to grow during recessions by providing income for families to spend. Under normal times, unemployment benefits can be collected for a maximum of 26 weeks. (Vinik) Montana (28 weeks) and Massachusetts (30 weeks) offer benefits for slightly longer, while other states offer them for less than 26 weeks. (Vinik) During recessions, the emergency benefit program passed by Congress extends that duration to 73 weeks. (Vinik) However, the system comes with pros and cons. The main problem with the unemployment system can be improved if states tighten eligibility rules and the unemployment issue could be solved if government pursued a stimulus program.
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For example, Tax cuts target those whom need an income boost, but they do not create a high number of jobs. People tend to save the money or pay down credit card debt instead of spending it and putting the multiplier effect in motion. Tax cuts do not make the economy grow. (Ghilarducci, 3) Infrastructure spending is a good stimulus strategy that both creates jobs and provides lasting public improvements. (Ghilarducci, 4) Other ways the government can create jobs is by providing local classes for retraining workers and federal aid to state and local governments that would keep workers on the job. (Cook) By creating jobs, the government is decreasing unemployment, while allowing income to increase so that it can be spent and help increase economic