The Effects of Unemployment on the Economy
Table of Contents
Introduction Effects of Unemployment Effects on family Social effects The Four components of Unemployment Globalization, Outsourcing Unemployment and National Debt) Financial Strain Conclusion
Effects of Unemployment on the Economy 2
The escalation of the unemployment rate in any country can bring with it an increase in taxes to offset the high cost of social aid to the unemployed. Unemployment affects our economy in many ways that are not always visible to the naked eye. Some of the effects of unemployment on an economy include higher financial burden on the government and the spending power of the unemployed decreases drastically limiting his ability to put money into the economy. High levels of unemployment increases the level of income inequality as well as widen the social divide of a country. Households that were classified as middle income families are finding themselves hovering just above the poverty line. This paper will show how the extended increasing unemployment rate has put a bigger burden of the government, increasing our national debt, increasing the social ills of the society as well as increasing to dangerously high level our GDP to debt ratio.
Effects of Unemployment
High unemployment can have a very negative impact on government expenditure each year; in most cases, government has to increase borrowing to meet its budgetary requirements. There is always an increase in the budget to carry out the necessary social programs. This increased unemployment causes a serious increase in the benefits that have to be paid out as well as a reduction in the amount of National Insurance contributions and taxes that are actually paid in, causing a shortfall in revenues projected for the fiscal year. In its borrowing the government will try to create a...