The Summary Of The Costs Of Unemployment

396 Words1 Page
bulb-icon

Recommended: Effects of unemployment

Some people believe that recessions are neither good nor bad but simply part of the natural survival of the fittest in the business world. Actually, it is not true. In The Costs of Unemployment, the authors tell us both the good and bad influences of recessions.

Recessions will cause unemployment because of the loss of output and GNP. Some people may argue that unemployment is ¡°a part of the functioning of the economy¡±. They are partly right, for the unemployment is inevitable because of the dynamic economy. This kind of unemployment is called natural rate of unemployment©¤the sum of frictional and structural unemployment. However, this is only a part of unemployment. Because the firms ¡°cut back and produce less¡± when they experience recessions, they will employ fewer workers. Therefore, the unemployment rate rises. This increase in unemployment caused by recessions and depressions is called cyclical unemployment.

Recessions cause social consequences. During the recessions, the unemployed suffers a lot. The authors say that many people lost their savings as the stock market crashed and thousands of banks failed. What they can depend on is only the meager relief distributed by the government. In addition, ¡°prolonged unemployment may also bring with it a number of social and person ills: anxiety, depression, a deterioration of physical and psychological health, drug abuse, and suicide¡±.

Thirdly, ¡°recessions may lead to lost output in the future¡±. When the companies experience recessions, they will reduce their investment and produce fewer products. As we all know, the investment is very important to ¡°future economic growth and progress¡±. The more the investment is reduced, the longer we will spend on the growth of economy.

On the other hand, recessions also have some benefits. First of all, recessions may reduce the rate of inflation. Secondly, in order to get survival in the recessions, companies must take some measures, such as trimming waste, managing resources better, and so on.

Show More
Related

  • Impact of the Great Recession in Texas and the Rio Grande Valley

    2714 Words  | 6 Pages

    This paper aims to discuss the Short-Term and Long-Term Impacts of the Great Recession and

    Read More

  • The Economic Policies of President Eisenhower

    1903 Words  | 4 Pages

    These conditions have the ability to cause recession. Now that an armistice has been reached in Korea, a recession is beginning to occur (Pach and Richardson, 54). I believe that the President’s chief concern should not be to make an immediate and fast acting restoration of the general economy. The problems of the federal deficit and the recession must wait until the more important problems are dealt with. The problem at hand is the rising rate of unemployment.

    Read More

  • The Great Recession

    670 Words  | 2 Pages

    Every few years, countries experience an economic decline which is commonly referred to as a recession. In recent years the U.S. has been faced with overcoming the most devastating global economic hardships since the Great Depression. This period “a period of declining GDP, accompanied by lower real income and higher unemployment” has been referred to as the Great Recession (McConnell, 2012 p.G-30). This paper will cover the issues which led to the recession, discuss the strategies taken by the Government and Federal Reserve to alleviate the crisis, and look at the future outlook of the U.S. economy. By examining the nation’s economic struggles during this time period (2007-2009), it will conclude that the current macroeconomic situation deals with unemployment, which is a direct result of the recession.

    Read More

  • Conflict Theory And Unemployment Essay

    627 Words  | 2 Pages

    However, the social and personal costs of unemployment are more extensive. These include factors such as poverty and debt, family tensions and breakdowns, homelessness, shame and stigma; of which can lead to increased social isolation, and an increase in the possibility of criminal activity (McClelland, A., & Macdonald, F.,

    Read More

  • The Causes Of The Great Depression

    1180 Words  | 3 Pages

    When the stock market started failing, many factories closed production of all types of goods. Businesses and banks started closing down and farmers fell into bankruptcy. Many people lose everything, their jobs, their savings, and their homes. More than thirteen million people are unemployed. The Great Depression caused major political changes.

    Read More

  • Macroeconomics Of Unemployment

    1238 Words  | 3 Pages

    Unemployment is a macroeconomic factor that is pertinent to an extensive economy at a regional level. Therefore it affects a large population rather than a few select individuals. Unemployment does not only have social costs, but economic costs too. The ILO, International Labour organization, defines unemployment as, ''People of working age, who are without work, but available for work and actively seeking employment.'' Therefore implying that it is a state of an individual looking for a job but not having one. Unemployment is one of the key indicators in determining the economic stability of a country; hence governments, businesses and consumers closely monitor it. There are numerous aspects that might lead to unemployment such as labour market conflicts and recessions in the economy. There are two main types of unemployment, which can be focused on, seasonal and cyclical unemployment. Seasonal unemployment occurs when a person is unemployed or their profession is not in demand during a particular season. On the contrary, cyclical unemployment occurs when there is less demand for goods and services in the market so consequently supply needs to be decreased.

    Read More

  • Sime Darby Berhad

    694 Words  | 2 Pages

    A bad economy can hurt business by decreasing the number of potential customers. When the economic state is bad, people will not want to buy property as they have less income and will only spend their money on more important things.

    Read More

  • Unemployment In The United States

    1887 Words  | 4 Pages

    These effects do not only transpire in society, they will also leak for the economy of the nation that is suffering from unemployment in an economic way only. One of the psychological effects is, people who are unemployed might start experiencing severe stress, anxiety, depression, decrease in self-confidence because unemployed people tend to be emotional and are likely to suffer from health problems. Moreover, people who are in the state of unemployment are also likely to feel pain from chronic diseases such as heart disease, obesity, or diabetes. People exposed to unemployment are prone to experience possible fights among their families, including their wives and children which can result in separations and eventually divorces. As for the economic perspective for unemployed people in a society, they would not have sufficient income to purchase needed resources and pay their mortgages and rent, and as a result the unemployed might become homeless and desperately in need.

    Read More

  • Macroeconomics Coursework

    2033 Words  | 5 Pages

    Many countries in the world have been suffering a recession in their economies and UK has not been an exception. A recession is a macroeconomic term describing one of the two business cycles that economies go through. The business cycles is characterized by either a boom where there are more business activities carried with a rapid economic growth and points of recession where there is retardation min economic growth. Various aspects and factors contribute to economic growth, which is measured through GDP. This factor may include savings, investments government spending plus other factors within either an increase or a decrease. Reduction in spending may lead to a recession while a n increase in spending may lead to expansion that is a boom in the economy.

    Read More

  • Proposal To Reduce Unemployment

    1572 Words  | 4 Pages

    In a recap, the three policies introduced, the Unemployment Reformation Act of 2059, the Infinite Education Opportunities Program Act, and the Unity Tax, will be a vital part in restoring and surpassing expectations for decreasing the percentage of Americans unemployed by ten to fifteen percent within the next six to eight months. I believe that with these policies the chances of a recession will not occur for a long period of time. For that matter, a recession may not occur again depending on how successful the unemployment plans develop. Nevertheless, I predict that by the year 2109 the employment rate for Americans will reach eighty-three to eighty-five percent.

    Read More

  • The Causes And Effects Of Unemployment

    1445 Words  | 3 Pages

    Losing your job can be one of the worst things that could happen to you. A lot of things start to go through your head and you begin to ask yourself several different questions. How will you pay your bills? How will you provide for your family? These are just a few that will immediately begin to weigh on your mind. Although your source of income has been taken, there is one thing that can help keep you stay afloat during these rough times. Unemployment will give you some source of income to assist you. What is unemployment? How much do you get and for how long? These are some of the questions that I will answer.

    Read More

  • Argumentative Essay On Unemployment

    518 Words  | 2 Pages

    In December 2007, the United States of America experienced a very scarce yet appealing setback. In fact, because of this specific dilemma between 200,000 and 500,000 were left unemployed and without a stable home. The national Bureau of the Economic research defined this nationwide downfall as “The great recession”. According to the U.S Bureau of labor statistics the unemployment rate has not made a drastic improvement since the start of the great recession. Unemployment has become that is still rising today with a slow rate of change. Unemployment is usually expressed as a number or as a percentage of a larger number. Although it has been ambiguous who has to be included in the percentage, there are members of society without a job, for whom it is certain that should not be added. Officially the unemployed are the people who are registered with the government as willing to work and able to work at a going wage rate but can’t find suitable employment despite an active search for work. In the article “why long-time employment can’t get back on track”, the author begins speaking on a ...

    Read More

  • Cause and Effect Essay: Unemployment

    665 Words  | 2 Pages

    One of the most life changing effects of unemployment is the loss of income. Especially if they are a single parent of if they have a large family to support. Having no money means eventually having no food, no clothes, no shelter, and no car. It also prevents one from doing many things and activities, even though their amount of leisure time has increased. One might not have money to go to the movies, play on sports’ teams, or do any other recreational things. Being unemployed for a long enough time leads to a lot of debt. Any money that has been saved ends up getting spent rather quickly with all of today’s living expenses. Twenty thousand dollars may seem like a lot of money to some people, but with no income that money gets spent before you know it.

    Read More

  • Effects Of Inflation Essay

    1615 Words  | 4 Pages

    Lower GDP for the economy also one of the consequences of unemployment in current time. High rate of this issue implies the economy is operating below full capacity and inefficient so that it will lead to lower output and incomes. Because people who are searching for their work usually will spend less in purchasing goods and

    Read More

  • Impact of Unemployment on the Family

    1874 Words  | 4 Pages

    The purpose of this paper is to understand the effects that unemployment has on the family as a whole. In today’s society being unemployed impacts greatly on almost every aspect of an individual’s life and depending on their personal circumstances, it is likely to impact on other family members lives too.

    Read More

More about The Summary Of The Costs Of Unemployment

Open Document