There are immense amounts of things that could affect GDP resulting in a decrease in the economy. Changes/affects due to the expenditures approach or the income approach could mess with GPD as well. Unemployment, underemployment, and discouraged workers can cause GDP to take a downturn because if people are unemployed, under-employed, or their discouraged workers, less productions of manufactured products are happening, thus negatively affecting GDP and the economy. As of today, there are millions of women and men that are currently unemployed. This unfortunate problem is negatively affecting the economy.
Government has to pay the unemployed some benefits. The greater the number of the unemployed or the longer they are without work the more money the government has to shell out. The nation not only therefore, has to deal with the lost income and decreased production but also with additional cost. Spending power The spending power of an unemployed person and his/her family decreases drastically and they would rather save than spend their money, which in turn affects the economy adversely. Reduced spending power of the employed Increased taxs and the insecurity about their own work may affect the spending power of the working people as well and they too may start to spend less than before north ayrshire affecting the economy and also the society in a negative manner.
Companies were losing money because of this unstable economy so there for they had to make some changes. The first thing that had to be done was to save money and they did this by cut the pay role. Employees of many years were fired or took massive pay cuts. The employers only kept a select few workers that they had to have. Carmack 3 If one did not make the employer’s expectation, they were fired.
Spending power The spending power of an unemployed person and his/her family decreases drastically and they would rather save than spend their money, which in turn affects the economy adversely. Reduced spending power of the employed Increased taxs and the insecurity about their own work may affect the spending power of the working people as well and they too may start to spend less than before north ayrshire affecting the economy and also the society in a negative manner.
Those who are employed will be severely affected in case of a rise in unemployment in the economy. Noticeably, reduction in wages and salary leads to decrease in the amount of tax collected on the income. This further hinders the scope of availability ... ... middle of paper ... ...l make the same salary that they had previously. This increases the debt owed by those families. Usually the amount of unemployment benefits is not enough to keep this cycle going.
Besides it strains the workforce. If these corporations continue incurring losses they eventually close down and as a result, the workforce loses jobs. This is what has been going on since December 2007. Unemployment is one of the biggest problems that governments have to deal with. (compston 2002).
These aspects had passed behind negative consequences such as illegal immigration; the increasing rates of crime and violence and social and family disorder which affect badly the society with all its classes. Many families were shattered due to the impact of unemployment. The whole country has to build a shield against that attack. It has to improve the vocational education system and to encourage private investments to give a chance for new workers. It is for granted that our country deserves more than what we give but trying is always
Standard of living: In times of unemployment the competition for jobs and the negotiation power of the individual decreases and thus also the living standard of people with the salaries packages and income reduced. 10. Employment gaps: To further complicate the situation the longer the individual is out of job the more difficult it becomes to find one. Employers find employment gasps as a negative aspect. No one wants to hire a person who has been out of work for some time even when there’s no fault of the individual per say.
Poverty causes separation in many, many ways worldly. Through states, schools and families. In conclusion, Poverty is drastically affecting the economy of America. It hits the children, the parents, and loving souls around and support them. Poverty affects the way the economy shifts environmentally, how the money spreads across from place to place and the way it rotates from bank to bank, slows down a lot each year.
And because during recession it is difficult for one to find a new job, those out of employment often stay there sometimes for as long as the recession lasts. As a result most people plunge in to hopelessness, in fact studies show a direct correlation between recessions, unemployment and suicide particularly in adult males as well as an increase in mortality rate in males who have been laid off. This can be attributed to by the psychological effects that come with recession More often than not, stocks drop during recession making it difficult to sell goods and services because consumers experience a decrease in purchasing power. Investments during recession suffer because of the decline in stock prices. Most investors fear economic loss and as a result do not invest.