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Best Country To Be Unemployed In

European governments offer the highest percentage of combined unemployment pay and state benefits, while the U.S. provides the least generous compensation to dismissed workers. The percentages cited are of their normal monthly pay packets.


* Unemployment rate: 3.3%

** Unemployment benefit in first year: 72%

Benefit after 12 months: 72%


* Unemployment rate: 19%

** Unemployment benefit in first year: 69%

Benefit after 12 months: 65%


* Unemployment rate: 10.1%

** Unemployment benefit in first year: 67%

Benefit after 12 months: 64%


* Unemployment rate: 7.5%

** Unemployment benefit in first year: 64%

Benefit after 12 months: 48%


* Unemployment rate: 8.2%

** Unemployment benefit in first year: 52%

Benefit after 12 months: 14%

Goto Maki by Wanderlei Jr..


* Unemployment rate: 14.5%

** Unemployment benefit in first year: 46%

Benefit after 12 months: 0


* Unemployment rate: 4.9%

** Unemployment benefit in first year: 45%

Benefit after 12 months: 3%

South Korea

* Unemployment rate: 4.4%

** Unemployment benefit in first year: 31%

Benefit after 12 months: 0


* Unemployment rate: 8%

** Unemployment benefit in first year: 28%

Benefit after 12 months: 28%


* Unemployment rate: 9.7%

** Unemployment benefit in first year: 28%

Benefit after 12 months: 0

* February 2010

** Percent of annual income

Data: Organization for Economic Cooperation & Development, U.K. Office of National Statistics, Turkey's Statistical Board

Maki-Goto by hhossny.

I think Spain and France are fantastic places to be unemployed, don't you think so? I have written before that Asian countries seem to have an unhealthy abhorrence towards unemployment benefits. We tend to have very few safety nets, and when an economy plunges into a deep recession, maybe at no fault to the general working public, many have no safety nets to fall on. We get ourselves into perilous situations.

What I am asking for is not a fully funded government unemployment scheme, but rather an unemployment insurance scheme, which will cost the government next to nothing if done properly. For the benefit of those who missed out, here is a repost of my article:

Wednesday, February 11, 2009

Malaysia Needs Unemployment Insurance

Our government has been postponing the need for unemployment insurance for too long. We do not have sufficient safety nets underpinning our country's social and economic systems. The concern has always been the cost side. The other argument is the incentive not to work. There is a bigger danger in having unemployment insurance - companies may be more "willing" to bite the bullet to lay off workers in such an environment.

We already have too many archaic rules pervading the economic life of Malaysians. Its quite debilitating really. We have no unemployment insurance, and every 7-10 years we will have a massive recession and many might not be able to honour their commitments owing to forces greater than them.

We can take the pedestal and say they deserve it for not being able to manage their financial affairs properly, but seriously, even drug addicts and prisoners get a second chance to rebuild their lives. I am not here to justify reckless behaviour, but to ask that the laws be fairer to the normal person. When you unfairly penalises a person, it does not just affect the person alone, in Malaysia's culture, people also have to take care of their parents and extended families. Hence the social impact is substantial.

I am not an insurance guy, but I think we can come up with a semi government body to do this, or even be part of EPF to do this. EPF can do this role well as it already has the database for checks and balances.

How about all employees contribute 1.5% to this Fund and the employer puts in another matching 1.5% of salary. Only employees who have contributed more than 1 year will be able to enjoy the benefits. If you are laid off, you will get 3 months full pay and 5 months of half pay of your last salary. These will be paid like normal salaries on a monthly basis, thus covering most expenses for at least 8 months. This will be in additional to the normal notice pay and severance pay.
Once you have taken the unemployment benefits, you will need to be working for at least another year before being qualified to obtain the benefits again.

Like I said I am no actuary, but all things being equal, the monthly 3% to the fund basically means 1 person is covered for every 33 employees. All things being equal again, in a downturn the Fund should be more than able to carry a 300 basis point jump in unemployment (e.g. if unemployment rate jumps from 3.5% to 6.5%, technically speaking we are better equipped to deal with it). EPF has the database and will be able to verify when a person has found new employment. In any system there will be bad hats trying to find loopholes - heavy penalties should be meted out to discourage bad behaviour by employers and employees.

During good times, the Fund will be able to accumulate surpluses, thus covering the outflows during bad times. It is not meant to be a crutch but part of a developing structure for a developing nation, that seeks to minimise social costs, where we can grow and shoulder the good and bad together. Any major shortfall will be borne by the government, which won't be necessary if the calculations are made properly. Its not a crutch really because its NOT borne by the taxpayers but by the contributors to the insurance scheme. That 8 months of pay will be very important as many are shouldering mortgages that needs to be serviced - its not like, no job then can go back to kampung and stay with parents or live off the land. Let's be realistic.

Comments said…
haha, like this a promoter at Jaya Jusco that get paid RM1,000/month will need to invest only 1.5% a year for only RM180 and after that he/she can enjoy life for 8 month without working and getting paid RM5,500. That's a 3000% return! He can then start working again and repeat it again and again.

The operators at the electronics factory will be the most happy.
Mona said…
Hello Ah Yap. Salvatore said "If you are laid off, you will get 3 months full pay and 5 months of half pay of your last salary." Laid off here means kena buang kerja (you're made redundant) not resign on purpose.

I think this is generally a good idea. It makes Malaysia a caring society. But Ah Yap has a good point as well - dishonest Malaysians will try to find the loopholes and will turn a good policy into a joke. said…
@Mona, oh shit, I miss the key point - laid off!

But still, creative Malaysian will pakat with the employer for 50 50 for laying them off!
clk said…
Perhaps part of the reason why we have such a big economic mess in the West and the US is due to costs such as this amongst other things.

Their borrowings both Public and Private to appease their masses in terms of spending and other popular measures needs to be eventually repaid by future generations; and also not forgetting a graying population as well.

Going into Yr 2020 by the Western World is not a going to be good.
kl said…
Unemployment insurance is a good idea whose time has not arrived in Malaysia. However, I cannot see the current government, which won't even adopt a minimum wage policy, implement such. Note that the biggest employer is also the government with over a million employees.

As for the private sector, many will have no qualms trying to beat the system one way or the other. Too many feel aggrieved they pay income tax but get next to nothing back in benefits. That does not bode well for its implementation.
see said…
You must look at the history what sparked generous safety net in the US & Europe . It was due to the The New Deal in US & Europe's frequent bouts of facism throughout history. In Asia ex-China, we are lucky not to experience tumultuous events....yet? China had its fair share of drama & what they got is decades of communism which is pretty much universal coverage of welfare

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