Sunday, January 5, 2020

Unemployment and Its Effect on the Economy and Society

Unemployment is an ongoing problem throughout the world. One may asked, what is unemployment? It is the number of persons who are willing and able to work but are unable to find jobs. Unemployment is harmful to a country because it imposes costs on a Society. The cost of employment to a nation can be categorised under three heading, namely  · The Social Cost  · The Cost to the Exchequer  · The Economic Cost The Social Cost of Unemployment The social cost of involuntary unemployment is incalculable. For an individual, the demoralising effect that it can have clearly depends upon whether the period of unemployment is short term or long term. Short term unemployment may have no serious effect on an individual whilst long term unemployment can†¦show more content†¦This means that society has experienced a lower standard of living than would have been possible without rising level of unemployment. The loss of potential output resulting from involuntary unemployment is clearly a serious matter for an economy. Resources which are willing and able to work in order to raise the rate of output and to boost living standards are failing to be employed. This is a true waste of resources. It is not so clear, however, whether the loss of potential output through voluntary unemployment is so serious. It may simple mean that be that more people are taking advantage of higher social security benefits to spend more time searching for suitable jobs. There are numerous causes to the problem of unemployment which may vary from country to country. Amongst them are Natural unemployment The level of natural unemployment can be defined as the number of persons who are employed even when the labour market is in long-run equilibrium that is when the total demand for labour is equal to the supply of labour at the prevailing level of real wage rates. 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