The Effects of Unemployment Roderick C. LaGrone COM 150 January 28, 2011 Holly McCusker The Effects of Unemployment Over the past ten years there has been a great shift in society’s employment system. Corporate America has taken major cutbacks in the working labor department that has left many citizens unemployed and destitute. Anger and concern over layoffs, wage unproductivity, declining benefits, and the movement of jobs overseas has left citizens with harsh and undesirable views of the actions and motivations of Corporate America. With the unemployment rate on a downward slope, American citizens have become distressed which has resulted in emotional, social, and, economic hardships. Even though the unemployment rate in the …show more content…
Unemployment causes a great deal of social and economic problems; it reduces national income, and decreased living standards. When individuals lose their source of income and have issues finding another job that meets their living standards, they tend to accept jobs that are below their standards and will usually work for as low as minimum wage to make ends meet. Because of this employers tend to find laborer more easily and are less likely to increase wages to attract workers. When employers lower their wages American society is once again affected by lowering consumer goods and capital. The increase in unemployment not only affects individuals, their families, and communities, but unemployment also causes a loss of human capital. When citizens are laid-off they cause a loss in human capital because they don't contribute skills and experience to the workforce. Securing a job is more difficult the longer a person is out of work because they are less preferred as new workers. The unemployed experience a loss of self-esteem and dignity which reduces their motivation leading to long-term unemployment and dependence on welfare for income support. Thus, unemployment results in a decline in labor market skills because those who are tirelessly unemployed lose valued skills. Job loss reduces the production of consumer and capital goods and decrease living standards and
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An increase in the unemployment rate means that more individuals do not have an income, thus meaning many households suffer reduced disposable funds. This causes a decrease in the level of aggregate demand within the economy and therefore reduces economic growth. This in turn causes a slower circular flow of income, meaning that households may be forced into or past poverty, as a result of the lowered income generated, reducing the living standards and quality of life. The downturn experienced by the economy can also offset many individuals seeing them not wanting to return back to the workforce due to the lack of jobs available, making them long-term unemployed rather than cyclically unemployed, or if the firm initially was promoting structural change, structurally unemployed. Combined with poverty, the aspect of unemployment can lead to other severe mental health issues and illness reaching extremes.
The largest cause of unemployment can be attributed to recession. The term recession refers to the backward movement of the economy for a long period. People spend only when they have to. (Nagle 2009). With people spending less there would be less money in circulation therefore, enterprises would suffer financially and people would suffer too. This is so because recession reduces the fiscal bases of enterprises, forcing these enterprises to reduce their workforce through layoffs. These enterprises lay off their workers in order to cut the costs they incur in terms of wage and salary payments.
For individual, it will bring the financial problems to them because they do not have money to support their expenditure in daily life. A worker who unemployed for a long time as a result can lose his self-esteem. The feeling of inadequacy can lead to depression, frustration and lastly can bring them to make a stupid decision such as suicide. Their job skills also may be loses if they lack of application.
Working off the last paragraph, less unemployment leads to a higher overall production of products, leading to a higher GDP. A higher GDP leads to a higher standard of living. Basically if everyone in an economy was working and being productive, the economy would start to flourish (Doc 2). But due to an increase in firings and unemployment, the cornucopia of the economy is struggling (Doc 3). The job market is suffering and business struggle to find workers (Doc 1). Workers are important to the economy, keeping it running successfully and completing the business
Since the early 2000’s the unemployment rates of the United States have been constantly changing. For most of this time unemployment rates were increasing at a quick pace as the country was dealing with internal financial issues of its own. When people are out of work the rates of depression and crime seem to skyrocket. This is due to the lack of funds coming into a home which result in some less than admirable acts being committed. There are many causes of unemployment and many effects that unemployment can have on not only our economy, but our personal lives as well.
Unemployment Issues in the United States Unemployment is one top issue that our government faces on a daily basis. Many people are being unemployed as we speak. Even though the government is trying to take a lead on this major issue, the rate of unemployment is just too high. Why I feel strongly about this issue is because many of us continue to search for jobs daily and still no reply. There are many reasons behind being unemployed and those reasons are little issues that the governor himself can fix within a year or so. We are still jobless, the minimum wage is too low and most of the jobs that pay well always ask if one Spanish.
Unemployment leads to financial problems and reduces the overall purchasing capacity of our nation. Unemployment can have benefits only to for things such as being provided food and reduced rent, which is called section eight and food stamps. Poverty compared to unemployment can be described different ways for example, poverty can cause unemployment but it if someone is below the poverty threshold they might get absolutely no help from the government and can not maintain a standard of living. Living conditions can affect the way people look at you as far as a job goes. There are multiple different ways that people look in others for a jobs such as dependability, honest, and reliable. A poor person is more likely to get overlooked for a job than a person in a higher class or middle class, that could possibly tie in with the fact that low income people have a lower level of education and not being able to present themselves in a formal manner. Taking care of their children would be a difficult task being at or below the poverty line with an income lower than 20,000 a year from both adults in the
Unemployment issues affects the community because they tend to have health problems, depression issues, stressed, low self-esteem issues, isolated from family and friends or tend to use some type of substance and abuse it, which happens to many of people and causes poverty within the community. When individuals have been laid off and terminated it’s a reality for many. Even though individuals may have the skills and education background that will qualify them for a new position some employers have filed the position with individuals that may not have met the requirements.
source of income. As time goes on, the unemployment rate should lower, but the initial spike in unemployment could hurt many families and lives.
Unemployment is considered the key indicator of a nation's economy and high unemployment rates will send shock waves through the economy. Unemployed individuals don't have expendable income which translates to a cut back in non-necessary spending which means a loss of sales tax revenue. The fewer individuals with decent paying jobs translate into fewer individuals making investments due to fear of financial security. Nations that are not financially stable creates a financial system with little confidence within the marketplace which will lead to a downturn in stock market value. Unemployed individuals are not paying state and federal taxes but instead sucking money out of the economy. Unemployed people will utilize unemployment insurance which will increase state deficits. Increases in unemployment insurance claims cause states to raise taxes to make up for the lost revenue created from unemployment. 45% of mortgage foreclosures is created by unemployment. Unemployment propels bankruptcy rates and foreclosure rates to rise. High foreclosure rates will lead to home values to fall. The impact of poverty is vast as nations have to raise taxes to absorb the impact which will create an economic spiral which will decrease investment, drive down the stock market value, slow spending due to concerns about financial security which translates to poor economic growth (Hudson,
John Burges and William Mitchell state that unemployment trend has acted as a “social exclusion perpetrated against particular sections of the community, in general the young, old, poor and uneducated” (1998). The issue then lays in the trade off between the
Once a you become unemployed, however, you become powerless, desperate for any source of an income. Once in this position, an individual is likely to take a job which is below their capabilities and for less pay. The difference in class and standing continues to increase. Those with money have the luxury of waiting for a job that strikes their interest, not just a job to make minimum wage. They can wait until an appropriate job comes up or they can further their education to improve their position even more. Economically, the world is entering into a new phase in which fewer workers will be needed to produce the goods and services for the global population. For most of the modern era, people's worth has been determined by the value of their labor and skills.
around the globe, explanations of this phenomenom are plenty. How does unemployment serve a purpose, or is it just another chance for the powerful to stamp on those with less power? The
Money is essential to any individual looking to have a decent lifestyle; labor is the avenue through which this is acquired. The economy goes through various fluctuations in activity causing unemployment to fall, rise, or level out. What this creates is the first type of unemployment, known as cyclical; frictional is the second type, caused by a temporary leave (for whatever reason) by the employee, and structural is the third type, varying with the economic changes in demand. The absence of unemployment at its maximum level is termed full employment, another version of unemployment. The term encompassing the sum of the frictional, structural, and, yet another type of unemployment, surplus unemployment is that of the natural rate of
Money is an important component that can help ones to function properly in this society. However, money defines our self-worth and value in this society. For decades, unemployment has become a big issue in our community. The younger generation are the one who suffers the most from the crisis. In 2009 alone, 6.7 million youths joined the ranks of the unemployed, and compare this with an average annual increase of 191,000 in the 10 years before the crisis 1997 to 2007(Elder,2010). Youth unemployment is a crucial issue in our society. Unfortunately, a lot of young people are going through that situation. When it comes to find a job, young people are the less fortunate for many reasons. For instance, some employers might be biased on ages and believes that young people do not have skills or enough experiences to perform at the level required for the jobs. The problem of youth unemployment has many causes and consequences in our society. Youth unemployment can affect the economy, family relationship, increase crime rates and, mental health.