Unemployment has always existed in all societies in spite of the fact that there has been a technological advancement. The most important causes are population that is increasing, technology and bad economic situation which happens when the budget is cut. The economic situation is the main reason because finances are always the problem when it comes to unemployment. There are economic crashes from time to time as well as the economic depression and that is when people lose their jobs or are unable to find a job in the first place. Each company needs to have enough money to be able to gove salaries to the employees and when they cannot achieve that anymore, they have to resort to layoff. The company becomes smaller and if the problem persists, it closes. The companies hire people who have the best qualifications and a good CV and recommendations. Education matters, but so does previous experience which is put in the resume of a person applying for a job. There are also people who are unable to find a job because of being physically disabled or because of health issued. After suffering an injury in an accident, people usually have to spend much time on recovery and if they end up permanently disabled, many jobs become unavailable for them. Illness is a cause that makes people be unemployed and feel worthless and it can severely damage their self-esteem. Unemployment has many negative causes and effects because it is bad for the economy and for people who do not have an income.
The major cause of unemployment is related to the technological progress even though it is related to the fact that the company is investing money in improvement. The effect of the technological advancement on unemployment is important as well because automation and robots make some employees redundant. There is no need for those positions because there was a replacement done by a machine. Computers and robots make some jobs unnecessary to be performed by actual workers. What is happening is that one person can replace a whole team by using a computer. When a company makes investments in research and development, it usually results in technologies replacing the work previously done by people.
Unemployment is also caused by the population that is increased because there are not enough job positions for so many people. There is a greater demand of all products with the increase of the population, but it has no effect on the employment. Moreover, there are more people than the available job positions because that is the structure of the world and of the global economy. There is a correlation between the new technologies and the increased number of people because technology replaces humans in their jobs. If this were not the case, more and more people would be needed for new job openings. These problems were always the issue but there is not a good way to resolve them.
The economic effect of unemployment is related to the population which is spending less money. People need to be employed in order for their lives to be fulfilled and for them to be healthy and happy. Having a fulfilling job and enough money is the key to leading a good life and maintain good mental health. On the other hand, unemployment can cause depression, anxiety, financial problems and many other emotional problems as well. Society depends on people who work and people who are unemployed have to be supported by the government. One of the leading causes of being unemployed is being fired or let go because the company had to decrease in size. Sometimes companies shut down and sometimes, some job positions become redundant. There is a problem with getting a new job as soon as a person is fired and companies might have prejudice against people who get fired for reason that they were not competent enough to keep their jobs. Also, after a layoff, there are not many opportunities to get a new job because of the crisis in the economy.
Another economic effect of unemployment is related to the fact that the government has to take care of the unemployed and spend money on them and on welfare. The serious effect of being unemployed is lack of money because a person stops getting a salary. This is particularly bad for families with one parent who is the provider but it has a negative effect on all the families. If there is no income, there will be no money for everyday life which includes buying food and clothes, driving a car or paying a rent or a mortgage. People with no income cannot do anything because the modern world revolves around consumerism. The negative effect of unemployment is the fact that people have more spare time, but they cannot afford to do anything they would normally do if they had money. For example, they can no longer afford doing sports or going to the theatre or a restaurant. Another effect of being unemployed is that people get in debts when being out of job because savings cannot last for a long time. In the worst case scenario people depend on welfare.
The effect of unemployment on people can result in having emotional problems. It is normal to feel useless when one is unemployed and it affects their self-esteem in a bad way. People begin to think that they are the problem and not the bad economy and they start to feel shame and lack of self-worth. There is also stress involved and it only increases with time because having no money is a major obstacle in the modern world. Such people may develop depression or resort to drugs and alcohol which could completely ruin their lives. “The concurrence and labor market trends suggest that recent declines in crime rate may be due in part to the current abundance of legal employment opportunities” (Raphael & Winter-Ebmer, 2001, p. 260). If people can find good jobs that pay well, they are less likely to resort to crime because there is no need for that. In this case, crime is not related to violence, but to crime in business. Also, unemployed people can develop addiction to drugs and alcohol which makes them capable of committing crimes as well. “For property crime rates, the results consistently indicate that unemployment increases crime” (Raphael & Winter-Ebmer, 2001, p. 261). When it comes to violence, murder is unlikely to happen, but theft is. There are also problems related to having family issues because there is no money to support the family and the person who was earning a lot of money cannot easily get used to being poor and not being able to provide for their family. Such a person can become violent towards the other members of the family because of the stress and this could make people separate as well. Even the strongest family cannot cope with so many emotional and financial problems.
Another effect of unemployment of people is the feeling of being useless. This could occur to anybody and it is beyond one’s control. It is important to be aware of that and wait patiently for the situation to improve. It is not only about having no income, it is about losing family, health and social life. “If an individual is unemployed, then this individual breaks a social custom, which may result in a loss of reputation and hence in a lower utility-level, in other words, a decline in life satisfaction results” (Kassenboehme & Haisken-DeNew, 2009, p. 450). People are supposed to be employed in order to be considered as the contributing members of the society, and if they are unemployed they believe that they lack competence and that they are incapable of doing anything which leads to frustration.
Unemployment has the worst consequences on young people who are starting their careers. “Dynamic simulations using an approximation to the lifecycle optimization process indicate that a six-month spell of unemployment experienced at the age 22 would result in an 8 percent lower wage rate, on average, at age 23” (Mroz & Savage, 2006, p. 260). Young people are not voluntarily unemployed and the experience of an early unemployment leaves long-term consequences. Moreover, young people are wasting valuable time they could be investing in gaining work experience because as they get older, there will be less opportunities to start from entry-level positions. Another effect is “that the youths already do seek out job-training opportunities as well as jobs with enhanced levels of on-the-job training, the most effective policies might be those that amplify the youths’ extant responses” (Mroz & Savage, 2006, p. 290).
People who lose their jobs often feel as if they lost their whole lives and they feel a lack of strength. However, it is important to recuperate as fast as possible and to start looking for new opportunities because a person’s creativity is the key to happiness and to being able to find a new job. Starting a business is always a good idea and losing a job can lead to a better and more fulfilled life after a person finds a way to solve the problem of unemployment.
References
Raphael, S., & Winter-Ebmer, R. (2001). Identifying the Effect of Unemployment on Crime. The Journal of Law & Economics, 44(1), 259-283.
Kassenboehmer, S. C., & Haisken-DeNew, J. P. (2009). You're Fired! The Causal Negative Effect of Entry Unemployment on Life Satisfaction. The Economic Journal, 119(536), 448-462.
