The Triggers And Impacts Of Unemployment Economics Essay

The economic welfare of any country depends on the rate of the financial growth. There are many determinants or the factors for the economic development of a country like industrialization, agriculture, populace, occupation etc. , one of the major signal for the economic growth is employment rate, as it has an adverse effect on the whole overall economy. Whenever there exists high degree of employment rate the development improves in so doing increasing the standard of living (Anderson, 2006).

High unemployment rate in a country causes social and financial problems in the community as a whole. Economic problems cause less production of goods and services, less distribution of income, lack of tax revenues, fall in GDP rate etc. (www. economywatch. com). Social problems cause's sociable ills and shows influence on individuals economically and psychologically. Individuals cannot meet their financial obligations on time and getting high stress which contributes to problems like ill-health, early fatality, suicides etc. (Clark, 2003)

The economists summarize unemployment as a disorder of jobless within an overall economy. Unemployment is lack of usage of resources and it eats up the development of the economy. It could be figured unemployment is inversely related to efficiency of the market. The annals of unemployment is directly related to history of industrialization. It causes unwanted job loss and willing employees without job. It really is worthwhile to say here that not everyone who is out of work sometimes appears as unemployed. A person with a large bundle of money not looking a job is not counted in the unemployed population in that he's not inclined to work in the first place, though he's officially unemployed. So unemployment refers to the shortcoming for willing workers to find gainful job. One of the major indicators of the economical health of the united states is the degree of unemployment. The impact is of high unemployment is seen in the difficulty in finding middle level jobs. The truth is that bare minimum wage level jobs are adequate but not considered as gainful employment of the majority of the labor force (Anderson, 2006).

Moreover, the consequences of unemployment are public, too, not only economic. Frequently, crime rates surge as people are unable to meet their needs through work. Divorce rates often grow because people cannot solve their financial problems. The pace of homelessness goes up, as do the rates for mental and physical health problems. Homes are foreclosed after or forgotten, and neighbourhoods deteriorate as a result. When there is high unemployment, people pay less in taxes and also pay less in sales taxes because they purchase fewer goods and services. As such unemployment is not a good thing for anyone in our modern culture, and even the people who continue to be employed are affected because of this (www. economywatch. com). The analysis will permit the governments to have initiatives to improve the production for overall development and decrease in unemployment. The analysis of unemployment provides a comparative data between open public and private sector. It also gives sign of under job in private and open public sectors. These factors become basis for the formulation of the economic policies of the united states for the future years.


Unemployment generally defined as the amount of persons (It is the percentage of work force depends on the population of the country) who are willing to work for the existing wage rates in culture but not utilized presently. Unemployment reduces the long run growth probable of the overall economy. When the problem arises where there are more other resources for the production and no man power causes wastage of financial resources and lost output of goods and services which has a great impact on government expenditure straight (Clark, 2003).

High unemployment causes less consumption of goods and services and less tax payments ends in higher authorities borrowing requirements. The impact of the unemployment sometimes appears with the individuals and household curtailing the use dramatically to meet financial obligation and factors like this have adverse impact on the whole current economic climate. It also reduces the result of goods and services which could have made by unemployed work force. An current economic climate is producing significantly below its potential if unemployment rate is extremely high, thus everyone in the culture loses by eating and enjoying less because less is produced for syndication (www. economywatch. com).

Many economists (Anderson, 2006) have done research studies to ease this problem and also to find solutions. Within this review we will discuss about the causes for unemployment, challenges to government and individuals to alleviate this problem. This report offers you the summary of the social ramifications of unemployment and the problems ahead for the situation.


There are several causes for unemployment and it depends on prevailing conditions of market and also on individual's understanding. The following are some of the causes for unemployment:

Change in technology is one of the serious cause for unemployment. As the technology changes employers search for people with latest complex caliber. They look for better substitutes. Job cuts due to change in the technology brings unemployment problem in the society.

Recession is primary factor for unemployment in almost all of the countries. Because of the financial crisis in one country can affect the other countries overall economy scheduled to globalization.

Changes in the global Markets are another important factor. Any country overall economy adversely affect when its exports are down the line scheduled to changes in global market segments, and upsurge in price. With this development suffers and companies unable to pay promptly and this escalates the rate of unemployment.

Job dissatisfaction by many employees is another cause, this happens when less attention given by the employers on the performance of worker. This brings about insufficient interest and desire to work and unemployment becomes inescapable, as employees deliberately loose their careers.

Employment discrimination based on the caste, faith, contest etc. , in the companies, an employee looses the simplicity to work in the organization.

Negative frame of mind by the employees to the employers creates unsafe environment in the organization. And this ultimately causes unemployment (www. blacksacademy. net).


Effect on Economy

Unemployment rate is determined by the market to market. In developed countries like United Sates and Europe the unemployment rate considered to be low because many people are one-man shop people and employed in agriculture. In countries where there are less one-man shop and more human population with less resources causes unemployment (Anderson, 2006).

Unemployment impacts the economy adversely as the productivity falls below the normal level. When there is certainly high rate of unemployment in the united states, government must are affected extra borrowing burden scheduled to diminish in the production and less ingestion of goods and services by the people. Not merely the unemployed people consume less its even used has vulnerable purchasing power due to dread about their loss of their careers. Unemployed not working and not contributing for income generation of the overall economy, but also they claim benefits from the federal government which is yet another cost for the economy as a whole (Baker, 2009).

Social Effects

Not only unemployment problem suffers the overall economy, even there are numerous social influences too. The following are a few of the social affects of unemployment:

Loss of skills: when you can find unemployment in the population, people loose their skills scheduled to no consumption and it triggers human capital damage.

Mental health issues: There will be loss of self confidence, frustration, negative behaviour towards common things when there exists loss of income, and someone's self-esteem gets hurt credited to these mental health problems.

Financial obstacles: Unemployment brings financial hurdles in the family. People cannot meet their obligations promptly and it brings disappointment among members of the family, brings tension at home and could leads to suicides.

Increase criminal offense rate: When there is unemployment in the contemporary society crime rate boosts. When people don't possess disposable income they can go to any degree like fraud, robbery and also murders to be able to endure their livelihood.

Political instability: Because of unemployment people lose trust on government and their supervision and this may bring politics instability.

Insecurity among existing employees: when the current economic climate is facing unemployment problem it brings insecurity among the existing employees and their purchasing vitality decreases anticipated to dread or insecurity on their jobs.

Poor quality lifestyle: Unemployment triggers poor standard of living as competition for careers will increase and folks accept for less earnings and their quality lifestyle will decrease due to their low income.

Employment Gap: Unemployment brings occupation gap in the firms for hiring the right person as well as for someone who has gone out of job must find a different one in difficult situations. This brings the gap in income technology (www. enotes. com; www. economywatch. com).


Several insurance policies have been designed to reduce the unemployment problem in the economy. Government just needs to concentrate on execution of these policies and work out hard in alleviating this problem. Government can grow capital projects like new roads, constructions of new clinics and major infrastructural assignments which may become a program in creation for more jobs throughout the market. It increases income technology to the overall economy (Fritz, 2006).

Reduction in taxation may bring higher purchasing capacity to the consumers. It gives some leisure to consumers in spending their throw-away income. Federal should take proper steps in investment decisions on huge jobs like iron and metallic, aviation etc. , proper plans should be made to supercharge up these tasks thereby creating employment opportunities. Proper recruitment, training and development are to be needed by every company to be able to raise the functions of employees, also to improve their skills and shows great performance in up taking of the business. Government can take initiation in minimizing the interest levels and it increases the demand for credit and boosts savings by the individuals. Necessary steps should be taken by the federal government in increasing the efficiency for the entire development of the country and lowering the unemployment problem throughout the market (Fritz, 2006).


It is not only the duty of the government for taking initiation in minimizing the unemployment problem, even individuals must take step to conquer this problem. Lot of adjustments are to be done by the individuals to emerge from this situation. With out taking hasty decisions like suicide, irritation they can plan and do proper modifications like debt modifications, expend their liquid property when it's required, cut down their expenses and also encourage other family to find careers so that they can compensate in income era (Fritz, 2006).

An individual has to increase their functions and participate in proper counselling and workout sessions to improve their performance levels and enhance their skills. They have to think about home employment aside their job by using their family. This also increases their standard of living (Fritz, 2006).


Unemployment is a serious issue for any economy. It creates negative influences to unemployed because they are jobless and suffer from worse potential customers to find new job and those who are used feel less secure to keep their jobs in future. However for overall development of market, government and people must take initiative steps in increasing the output and improving the typical of living.

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