Free Thesis Statement About The Effects Of Unemployment

A general definition for unemployment is the situation where individuals who are able and willing to work cannot find any form of income – earning jobs. A more structured definition of unemployment is “An economic condition marked by the fact that individuals actively seeking jobs remain un-hired,” (Investor Words, 2015). Additionally, unemployment figures are presented as percentages of the total population. These figures represent that proportion of the available workforce that does not have jobs. The level of unemployment in a country depends largely on the economic, educational and social factors in the society. There are several types of unemployment: cyclical, structural, seasonal, voluntary, or technical. While a number of individuals in the society prefer not to work, their unemployment status impacts the social and economic development of the country.
There a number of factors that determines or the employment status of an individual. One of the main causes of unemployment in a country is the economic structure or strength of the country. When an individual loses his job, quits or fired, he becomes unemployed. This unemployment means that the individual will not be able to make a financial contribution to the economic development of the country. Individuals are sometime forced into unemployment as some jobs are seasonal and as such low season and off-seasons lends itself to an increase in the unemployment rate in the country. The tourism sector in the country is a clear example of seasonal employment in tourist based economic countries. On the other hand, countries that have a struggling or stagnant economy have grave problems with structural adjustments arising from economic instability in the country. Therefore, workers in these sectors are laid off when there is upheaval in the country’s economic standing.
Additionally, unemployment arises from the rapid changes in the technological arena. These changes may decrease or increase the level of unemployment in the country. In companies that are unable to purchase new machinery for production, find that the operations within the company slows down considerably. The workers are left to choose between being laid off and working on rotation or shifts. Either way, the loss of income from unemployment leads to inevitable changes in the way individuals spend money and build the economy. New computer software and programs impact the amount of work that the employee carries out on a daily basis. Therefore, the employees whose jobs no longer require manual labor find that they too are unemployed.
Stefania et.al points out “changes in the structure of industries and economic activities under the impact of diversification demand for goods, the economic crisis for a long time inevitably lead to the reduction of work requests,” (Stefania, 2013, p. 32) and unemployment. In addition, immigration affects the unemployment rate as immigrants work for very low wage packages and the skilled workers in the country lose their jobs. These immigrants migrate into the countries illegally and build a low-wage income based that impacts the economic development of the country. The illegal immigrants do not pay taxes and the government cannot collect revenues from these individuals. The fact that they work for low wages also has a tremendous impact on the country, as the skilled workers lose their jobs and the problems of re-training these workers after a while becomes a problem to the government and the companies .
The health of the labor force and the willingness of the employees to work impacts the level of employment in the country. In fact, individuals who are not willing to adjust to the new ways of doing things in the workplace may find that they are fired. Poor health conditions contribute to a slowing down in the production in the country and an increase in the number of days that the individuals take from work. Many employers assess the workers level of dedication to their job and the level of enthusiasm that the workers display. Dedication and enthusiasm produce excellent work and limits the prospects of unemployment.
The fact is that the level of income and the investment in the country determines the rate of unemployment in the country. If a country is prosperous, then the people remain employed as there is a demand for goods and services which are paid for by the consumer. As such, there is enough money to keep individuals employed. If there is no investment in the country, then the economic structure of the government fails and the country becomes indebted to lending agencies. The government use the monies the collect in taxes to run the country. If individuals do not work then they cannot pay taxes. As a result, the government faces an economic decline.
The effect of unemployment varies according to the largest areas of employment. The government suffers from unemployment because less people work and therefore there is a reduction in the amount of taxes that these unemployed individuals pay. As a consequence, the government gets less tax revenue and this has a tremendous impact on the financial capacities of the country. The lower economic growth or GDP suffers when there is a high rate of unemployment in the country. Businesses will not be able to produce the required quota of services and goods that would generally improve the economy of the country. As such, there is a limit to the output of the goods and services that organizations produce. Hence, the GDP reduces and the government’s spending and taxation reduces. With this reduction, the government’s finances reduce and there is an increase health and welfare costs in the country. Unemployment in the economy leads to the reduction in the number of individuals who work. With the loss of income, individuals cannot pay for health care costs and the increase in claims. The increase in claims put a strain on the government revenues.
The increase in unemployment has increases the supply-side costs. This means that the unemployment in the in the economy increases as more people will be out of a job. These individuals should be taught practical skills so that they can become employable by companies. The increase in skills training programs brings about an increase in the amount of money that the government must spend to train these unemployed individuals. This added expenditure places a strain on the government financial resources as the money could be spent on other areas that need development.
Companies suffer from the unemployment rate in the country. The biggest problem that these companies will have is the issue of lower wage costs. The reality is that unemployment in a country leads to an increase in the supply of labor in the companies. As a result, there is downward pressure on the wages that these individuals receive as labor decreases and desperate individuals take jobs for lower wages than is the norm. Unemployment leads to the creation of an increased labor pool. This labor pool gives companies a variety of choices with the pool of workers. Consequently, firms hired skilled and experienced workers for low wages.
Similarly, the demand for goods and services decrease as there is less demand for such services. The fact is that unemployment gives way to a reduction in the dispensable income of individuals. In the end, there is a reduction in company profits as the sales decrease. Additionally, the rate of unemployment increases the demand for inferior goods as individuals will gravitate towards cheaper goods rather than quality goods. With the increase in unemployment in the country, individuals lean towards purchasing lower quality goods as these are more affordable.
Unemployment has a tremendous impact on the people in a country. Unemployed individuals resort to substandard living conditions. Conversely, these individuals suffer a loss of income and as such, they deplete their savings easily and in turn buy inferior goods at a lower rate. The loss of skills increases as individuals who are unemployed stop working and lose interest in maintaining their employable skills. The fact is that the length of time that an individual stays unemployed, the more money the companies have to pay to retrain these individuals. In the end, the unemployed mass often become de-motivated as they lose confidence in self. Katz reiterates the idea that “many job losers from sectors such as construction and manufacturing may face difficulties in making the psychological and financial adjustments as well as gaining the training and education required for the new jobs available in the growing sectors ,” (Katz, 2010, p. 6).
In addition, Katz suggests that “greater educational attainment has been the traditional way young Americans acquire the skills demanded by growing occupations and regions,” (Katz, 2010, p. 6), but with the increase in unemployment children cannot get a solid education that will guarantee them a place in the job market. In fact, “greater federal aid to higher education may be necessary, given the budgetary problems of most states,” Katz, 2010, p. 6) and the lack of employment opportunities for families.
In concluding, unemployment is the lack of jobs for skilled and unskilled workers. There are different types of unemployment. Many of these unemployment issues arise from justifiable situations in the economy as the government suffers financial setbacks from the changes in the global market. Regardless of the causes of unemployment, it has a tremendous impact on the society as a whole. The government faces loss of revenue and an increase in the money that they spend as they try to keep the economy alive. In addition, companies lose skilled workers who have to be re-trained when they stay unemployed for too long. Individuals who are unemployed become de-motivated and many become depressed because they lose their self-confidence.

Works Cited

Investor Words, Unemployment (2015) Viewed at http://www.investorwords.com Accessed
February 22, 2015
Katz, Lawrence, (2010, April 29) Long-Term Unemployment in the Great Recession Testimony
for the Joint Economic Committee U.S. Congress Hearing on “Long-Term
Unemployment: Causes, Consequences and Solutions” Cannon House Office Building,
Room 210
Stefania, L. et.al (2013) The Impact of Unemployment on Economic Growth in Romania, During
The Crisis Academy of Economic Studies, Bucharest Romanian Statistical Review nr. 6 /
2013