Unemployment Causes and Consequences

Considering the unpredictable nature of economy today, unemployment is something any of us may have to face at almost any point of time in our careers. The inflating world population, if characterized by a decline in its educated lot, can leave a huge number of people unemployed. The economic imbalance in society is one of the important causes of unemployment. The consequences of unemployment are many. Apart from adding to the economic imbalance of society, unemployment results in dissatisfied and frustrated individuals who are forced by circumstances to remain unproductive.

Unemployment Causes and Consequences

According to the Keynesian economic theory, unemployment results from insufficient effective demand for goods and services in an economy. Some believe that structural problems and inefficiencies in the labor market cause unemployment. Others believe that regulations like minimum wage laws imposed on the labor market lead to unemployment. Some thinkers believe that unemployment is a result of the law of demand and supply not being applied in case of employing people. A decline in the demand for products or services of a company does not result in the decrease in wages of the company employees. And this may strike an imbalance in the economy.

Unemployed individuals have to go through a tight economic crunch. They are unable to meet their financial obligations. This may lead to a decline in their standard of living. Lack of funds is sure to have a deep impact on their expenses. The consequences of employment can be as grave as homelessness due to failure of the unemployed individuals to repay home loans or pay house rents. Underemployment is one of the serious consequences of unemployment. On losing jobs, people are forced to take up jobs that do not befit their skills, experience and educational qualification. The other major consequence of unemployment is anxiety in the minds of the unemployed people. Unemployed individuals become pessimistic about life and may have to face psychological problems resulting from mental stress.

Unemployment hampers the economic as well as the social status of society. Unemployment benefits serve as a strong support during the period of one’s unemployment. An individual can claim the unemployment benefits if he/she has been forced to quit the job. To know more about this, read about applying for unemployment benefits. Unemployment benefits are a temporary relief from unemployment. The real solution to unemployment needs to be found out by carefully analyzing its causes. The causes of unemployment need to be analyzed carefully to find a solution to this calamity called unemployment, which eclipses life.