This essay will argue that the government should distribute subsidies for some people who are able to work, but cannot find a jobs to reduce economic problems, improve the standard of living of the unemployed, and even reduce crime. Unemployment basically means people who lack of seeking jobs. “The unemployed are people able, available and willing to work at the going wage rate but cannot find a job despite an active search for work” (Riley, 2012). Unemployment occurs when an expansion in demand rates, while the economic growth goes downward and layoff starts increasing because of a depression from the economy (Hardman, 1999). High rates of joblessness are the main obstacle that is damaging the social development as a whole.
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.
Effect of unemployment on economy Some of the well-known effects of unemployment on the economy are: Unemployment financial costs The government and the nation in many countries the suffer. 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.
Increased borrowing by govt. Tax revenue will fall because there are less people paying income tax and VAT. Also the govt. will have to spend more on unemployment benefits people will not be able to support their families or themselves due to no income and ongoing expenses. Lower GDP for the economy, the economy will be below full capacity this is inefficient and will lead to lower output and
Inflation is a wide phenomenon where prices increase thus resulting less buying power of individuals. Unemployment affects not just the person himself but also his/her family. Unemployment brings with it despair, unhappiness and anguish. It forces people to live their lives in a way they do not wish to, the life expectancy is negatively affected. Life expectancy is the way in which people living are able to satisfy their needs/wants.
Being able to support a family is already a difficult task but when people are getting laid off from jobs, unemployment rates are increasing, and the economy is struggling many people can barely afford to buy necessities for themselves never mind for an entire family. An extended decrease in fertility levels could have hugely negative effects on the country’s demography. Lower fertility rates mean less babies being born which in turn decreases the younger age population while the aging population slowly increases. This is one of the main issues with low fertility because it does not evenly decrease the country’s population. I have found a couple of articles from previous papers to support my thesis.
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.
Conclusion Unemployment is inversely related to changes in GDP. When GDP rises Unemployment goes down and when GPD falls Unemployment goes up. Striking a balance between these two is important. If unemployment increases too high then the economy is in jeopardy because too many people are without employment and cannot put money back into the economy, because there is not enough money in the system for employers to be able to hire new workers. Striking a balance between these three factors is vital to the functionality and growth of the U.S economy.
These problems may include the loss of real output(real GDP) as the economy has unused labor so its producing inside the PPC curve, a loss of tax revenue for the government as unemployed people don’t pay taxes and this is also followed by costs to the government for unemployment benefits which it provides for unemployed people. The main point is how to fix stagflation. Fixing this economical problem has many different methods according to different economists, but one method which has proved to be effective is increasing the interest rates to a point where borrowing money would be practically impossible therefore taking the country into
As a result, there is less money available to spend on the economy of the country, which again leads to loss of jobs. Thus, it becomes a continuous cycle and it can extremely havoc economy. Unemployment for anyone is extremely unpleasant situation. The situation where someone does not