Unemployment means being out of a job or in a situation where the individual is willing to work but has none.
The effects of unemployment on society and economy are far-reaching and can have a significant impact on individuals, families, and communities. Unemployment can lead to financial hardship, social isolation, and mental health problems. It can also strain relationships, increase crime rates, and lead to political instability.
This article brings and discusses the main issues/effects of unemployment on our society and economy.
The Cost of Unemployment – Economic
Some of the well-known effects of unemployment on the economy are:
1.) Unemployment financial costs
The government and the nation suffer. In many countries, the 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. Therefore, the nation not only has to deal with the lost income and decreased production but also with additional costs.
2.) 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.
3.) Reduced spending power of the employed
Increased taxes 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, thus affecting the economy and also the society in a negative manner.
4.) Recession
With the increase rates of unemployment, other economic factors are significantly affected, such as the income per person, health costs, quality of health care, standard of living, and poverty.
All these affects not just the economy but the entire systems and society in general.
The effect of unemployment on our society
Unemployment affects not just the person himself but also his/her family and, in the long run, the society where he lives.
Unemployment brings with it despair, unhappiness, and anguish. It forces people to live their lives in a way they do not wish to – life expectancy is negatively affected.
Life expectancy is the ease by which people living in a time/place are able to satisfy their needs/wants. Here are the main aspects:
1. Mental health: Mental health problems like low self-confidence, feeling unworthy, depression, and hopelessness.
With the lost income and the frustration involved in it, the recently unemployed may develop negative attitudes toward common things in life and may feel that all sense of purpose is lost. Frequent emotions could be low self-esteem, inadequateness, and feeling dejected and hopeless.
2. Health diseases: The overall tension of unemployment can increase dramatically general health issues of individuals.
3. Tension at home: Quarrels and arguments at home front which may lead to tension and increased numbers of divorces, etc.
4. Political issues: Loss of trust in the administration and the government which may lead to political instability.
5. Tension over taxes rise: Unemployment also brings discontent and frustration amongst the tax-paying citizens. In order to meet the demands of the unemployment fund, the government many times may have to increase taxes, thus giving way to restlessness amongst the tax-paying citizens.
6. Insecurity amongst employees: The prevailing unemployment and the plight of the unemployed people and their families may create fear and insecurity even in the currently employed people.
7. Crime and violence: Increase in the rate of crime.
8. Suicide cases: Increase in the rate of suicide attempts and actual suicides as well.
9. Social outing: Unemployment may bring a decrease in social outings and interactions with other people, including friends.
10. Stigma: Unemployment brings more than just ‘no work’. It also brings with it the disgrace that the person has to bear. Nobody likes to be termed as unemployed.
11. Standard of living: In times of unemployment, the competition for jobs and the negotiation power of the individual decreases, and thus also the living standard of people with reduced salary packages and income.
12. Employment gaps: To further complicate the situation, the longer the individual is out of a job, the more difficult it becomes to find one.
Employers find employment gaps a negative aspect. No one wants to hire a person who has been out of work for some time, even when there’s no fault of the individual per se.
13. Loss of skills’ usage: The unemployed are not able to put their skills to use. And in a situation where it goes on for too long, the person may have to lose some of his/her skills.
Social and Psychological Impacts of Unemployment
Apart from the economic consequences, unemployment also has significant social and psychological impacts on individuals and society as a whole.
Here are some additional effects worth considering:
1. Social isolation:
Unemployment can lead to social isolation as individuals may withdraw from social interactions due to feelings of shame, embarrassment, or the inability to participate in activities that require financial resources.
This isolation can have detrimental effects on mental health and overall well-being.
2. Strained relationships:
Financial strain and the stress associated with unemployment can strain relationships with family, friends, and partners.
The inability to contribute financially and fulfill social roles may lead to conflicts and strained dynamics within households.
3. Skill deterioration:
Long-term unemployment can result in a loss of skills and knowledge.
Without opportunities to utilize and enhance their skills, individuals may experience a decline in their professional abilities, making it more challenging to re-enter the workforce and contributing to a cycle of prolonged unemployment.
4. Loss of social identity:
Work provides individuals with a sense of purpose, identity, and belonging within society.
When unemployed, individuals may experience a loss of social identity, feeling disconnected from the productive and valued roles they once held. This loss can impact self-esteem and overall psychological well-being.
5. Generational impacts:
Unemployment can have intergenerational effects, particularly when young individuals struggle to enter the job market or experience long periods of unemployment early in their careers.
This can hinder their long-term prospects, limit earning potential, and perpetuate cycles of poverty and unemployment within families.
6. Increased inequality:
Unemployment exacerbates existing social and economic inequalities within society.
Certain marginalized groups, such as racial and ethnic minorities, individuals with disabilities, and those from lower socioeconomic backgrounds, often face higher rates of unemployment and greater challenges in finding employment opportunities.
7. Strain on public resources:
High levels of unemployment place a burden on public resources, including social welfare programs and healthcare systems.
Governments must allocate significant funds to support the unemployed, provide job training, and address the social consequences of unemployment, which can strain public finances.
8. Lost human potential:
Unemployment represents a loss of human potential for both individuals and society.
When individuals are unable to contribute their skills, knowledge, and talents to the workforce, it hampers overall economic growth and development. Society misses out on the innovations and productivity that a fully employed population can generate.
Summary
Addressing the negative impacts of unemployment requires a comprehensive approach that includes not only economic policies to stimulate job creation but also social support systems, mental health services, and initiatives aimed at reducing inequality and promoting inclusive growth.
By addressing the multifaceted effects of unemployment, societies can strive for greater well-being and prosperity for all.