unemployment impact

While many factors influence a country's progress, such as industrialization, population, agriculture, and jobs, economic growth determines the health of its people. The level of employment is one measure of an economy's growth because it raises people's living standards. It also removes social evils by removing the desire for individuals to engage in immoral means of making a living. When there is a high degree of unemployment, many complications can arise, such as stress-related diseases, premature mortality, and suicides, to name a few. Developing countries have high unemployment rates, and those that do have jobs receive low wages (Barros et al 359). In such nations, the living conditions of the people are very poor, malnutrition levels are high, and infant mortality rate is also high. Unemployment is defined as a condition of joblessness in an economy due to inadequate utilization of resources and other factors leading to impacts such as poor economic growth, increased social evils, and suffering to the citizens.
High unemployment rate has adverse effects on the economy of a country since it leads to low productivity and poor economic growth. High rate of unemployment lead to low consumption of goods and services since people have low purchasing power (Barros et al 359). If the consumption of goods and services is low due to low incomes earned by citizens, manufactures and other producers tend to reduce the volumes of good produced. Some people may never afford basic commodities and need government intervention. Deterioration of the economy in which production decreases leads low GDP and percapita income (Barros et al 360). As a result, investors shy away from investing in countries with high rates of unemployment, as they fear making losses due to low sales. The government has to take measures to help its citizens in accessing basic needs, health services, and education among others. This can ensure availability of vital services and improve the living conditions of many people. Decreased production leads to starvation, increased school dropout rate, and other problems forcing government to find urgent solutions. Some of the measures taken include borrowings from other countries increasing government debt. According to Dritsakis and Stamatiou (3), increased rate of unemployment has led to the economic decline of Greece due to dismantling of the production structure. Economies of developed nations can be destroyed by increased unemployment rates since it tends to affect all sectors. If the government decides to keep on borrowing, paying the huge debts may be a big issue leading to collapse of such economies. When many people are jobless, production declines because of inadequate market leading to poverty and poor living conditions. People save less, invest less, and have low earnings creating an economy of subsistence production. The government has to shift its development goals to those that involve creating of job opportunities for its citizens. A decline in real wage affects an economy of a country as many people find it difficult to cater for basic and secondary needs.
According to Brand (359), loss of jobs has several social and psychological impacts on the society due to their decreased incomes that make their lives very difficult. High rate of unemployment leads to social problems such as increase in crime rate as people try to find their means of survival. For instance, the young generation engages in criminal activities as they become frustrated due to joblessness. They engage in robbery with violence, murders, kidnappings, and prostitution among others. In addition, they abuse drugs causing more problems to the population since many cannot take care of the families. Street children are many in countries with high employment rates especially in slums (Brand359). Another problem faced by unemployed people is stress and its related illnesses such as depression and mental problems. Due to poverty levels, parents cannot take their children to school and the thought of them dropping out affect their psychological wellbeing resulting to stress. Corruption in government departments increases as people bribe the management to be employed. In addition, people in power embezzle government funds to invest in private businesses aiming to increase their wealth. Cases of heads of government corporations misusing public funds are rampant in such countries leading to closures (Brand 360). Another social problem that arises is the increase in fraud cases, grabbing of public resources, and violence among others. As the rate increases people tend to despair because of the deplorable conditions, they are exposed to. For instance, a family that cannot educate their children contributes to a generation of poor people forming a vicious cycle of poverty. A country cannot develop if it has a large population of unemployed people specially the youth.
The government also suffers when the level of unemployment rises due to low revenue as only a few people earn enough to pay tax. Many countries depend on the employed people for tax earnings, which they pay as income tax every month. In every nation, there are tax blackets that are taxed depending on the set minimum taxable income. With a large population earning low incomes due to lack of jobs the government cannot collect enough revenue. Unemployment also reduces the ability of individuals to invest in businesses, which leads to loss of revenues to the government through licensing, land use, and other fees (Brand 362). This can have a big impact on the government finances hindering development. Stagnation of the economy may occur since the government may not sustain projects that can improve livelihoods. Since only a few people are employed, firms may need to reduce production of goods and services because buyers are few. Consequently, this results in low GDP and poor living conditions of the people as it happened in Malaysia (Irpan, Mat Saad, and Ibrahim 4057). Furthermore, welfare costs are likely to increase since the number of people claiming benefits is likely to rise. The government and the country suffer since some nations have to give some financial benefits to the unemployed population. A country with a large unemployed population is likely to spend a lot of money that would be channelled to other development programs. Furthermore, increased unemployment is blamed for onset of economic recessions creating more problems for nations. Governments sometimes have to request for donations such as food, funds for education, and health among others to help the suffering people. As a result, it may compromise the sovereignty of the state since it has to adhere to conditions by donors, which may hinder developments. Governments have a big role to play to ensure that their economies are vibrant to reduce the number of jobless people and improve their living standards (Brand 362). However, they must initiate projects that help in creation of jobs, building infrastructure, and initiating other developments in the economy. Improvement of education and health systems can help in improving the economy of a country, quality of education, and health of individuals. In this case, more jobs can be created especially in the public sector.
In conclusion, economic growth of any nation can be a great determinant of the welfare of the citizens although several factors predict economic development such as industrialization, population, agriculture, and employment. An economy, which is growing has high employment rate, which in turn improves the living standards of the people. Increased unemployment has negative impacts on an economy of a country since it can cause low productivity. In addition, it may reduce consumption of goods and services since citizens have low purchasing power. High rate of unemployment leads to social problems such as increase in crime rate as people try to find some means of earning incomes. For instance, some people may engage in criminal activities as they become frustrated due to joblessness. The government also experiences hardships due to low revenue as only a few people earn enough to pay tax. In many countries, tax comes from employed individuals and when there are few jobs for the people the tax revenue reduces. As a result, the nation suffers low productivity, slow development rate, and poor infrastructural developments among others. With proper economic planning countries can improve their economies and create more jobs opportunities for many people. Other solutions may include infrastructural development, encouraging self-employments, and promotion of local industries among others.
Works Cited
Barros, Ricardo Paes de, et al. "Poverty, Inequality and Macroeconomic Instability." (2015).
Brand, Jennie E. "The Far-Reaching Impact of Job Loss and Unemployment." Annual Review of Sociology 41 (2015): 359-375.
Dritsakis and Stamatiou. "The Effects of Unemployment on Economic Growth in Greece. An ARDL Bound Test Approach." Romanian Economic Journal 19.62 (2016).Holden, Steinar, and Victoria Sparrman. "Do Government Purchases Affect Unemployment?." The Scandinavian Journal of Economics (2016).
Irpan, Hamidah Muhd, Rosfadzimi Mat Saad, and Noorazilah Ibrahim. "Investigating Relationship between Unemployment Rate and GDP Growth in Malaysia." International Information Institute (Tokyo). Information 19.9B (2016): 4057.
Urbanos-Garrido, Rosa M., and Beatriz G. Lopez-Valcarcel. "The Influence of the Economic Crisis on the Association between Unemployment and Health: An Empirical Analysis for Spain." The European Journal of Health Economics 16.2 (2015): 175-184.