The Costs of Unemployment

Every government around the globe will look at the management of unemployment as one of the most daunting jobs in the world. When people could not find the jobs they are looking for which meet their credential due to a lack of demand from employers, that only indicates that there is not enough available jobs created as a result of a healthy business activity in the society. It is a common scenario that government is blamed whenever there is a lack of jobs. The good thing about the United States is that through the Department of Labor’s Bureau of Labor Statistics, the public is made aware of the employment conditions on a monthly basis. Surveys are conducted regularly so that the government is guided by the key factors associated with the employment summary report such as unemployment rate, groups of workers getting the most jobs, business sectors that are thriving or declining as well as those creating the most or least jobs, and other microeconomic indicators that assess the overall economic condition of the country in terms of employment and unemployment. Not all countries have enough resources to measure unemployment rate month per month.

One cost of unemployment is loss of income for individuals. With an increasing rate of unemployment, more workers in between jobs or looking for better paying jobs after layoffs are losing stable income to support their respective households. As more people become unemployed and depend solely on unemployment insurance, more people will consume basic goods in lesser amounts. In turn, businessmen will also lose profits due to slow consumption of their products for sale.

The cost of unemployment to the society is tremendous as well since the output or consumption of goods and services will reduce. Whenever unemployment rate is high, workers’ buying powers are minimized, and so the demand for products is lower than the supply being made available by several business segments.