[gruez]

Okay, but you can't expect companies to keep a buffer out of their own good will. You need the government to do it. Keeping such a buffer at a per company level probably is a bad idea too, because downturns tend to be sectoral. A bigger risk pool (eg. across industries) would be far more robust. Surprise! You just invented unemployment insurance!

[interactivecode]

Yes you can expect companies to a buffer. It starts by questioning layoffs like this. Because they should have depleted the buffer first before layoffs. If after that layoffs still happen the gov should have a second layer of supports in place. Because indeed like you said if a whole sector has a downturn its difficult for someone to find a new job.

[Manuel_D]

What is the economic rationale behind a company keeping a large portion of its workforce idle? That's a waste of labor. Sure, it's probably a good idea to keep people paid for a while after layoffs to ease their transition to an in-demand job. But that's what unemployment benefits do.

[interactivecode]

What is a waste and to whom? The employees still get paid, so they get the main value they signed up for. A bigger waste would be loss of income and security for these employees.

So its a waste for the bottom line of the company owners? Thats what 100 people max? Compared to 10.000 jobs and livelihoods lost its pretty clear to me.

[gruez]

>What is a waste and to whom?

To the economy as a whole. At the end of the day you're still having workers twiddle their thumbs not doing anything productive, with no incentive to move onto another job where they'll actually be doing something useful. We should weigh this against the workers' economic security, but let's not pretend that keeping workers around is some sort of free lunch.

[phpisthebest]

But why do we need government do to that, if it is insurance why cant it be provided by a insurance company.

better, Cheaper, and with out the political corruption that comes with all government programs.

Hell we just saw during COVID unemployment "insurance" being used as a political tool to essentially buy votes, by all political parties and organizations. Also used a tool to make authoritarian control of the population palatable

Further How many dystopian novels have the trope of the masses being paid not to work...

The axiom of a "social safety net" is apt but not the the way people using it believe it to be, the social safety net in practice tends to be like a fishing net, once you get entangled in it, you rarely escape it...