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High Level Of Unemployment In The United States

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Recommended: Effects of unemployment in economy

Unemployment happen when people active to seek the work but unable to get work. This will eventually resulted in the loss of incomes, production and human capital of a nation. High level of unemployment usually occurs when the economy recession where labour supply exceeds demand from the employers. Long-term unemployment will damages a person’s job prospects by destroying human capital. The degree of unemployment in a nation indicates the economic health of the country. Unemployment rate is used to measure the mess to take full advantages of labour resources because it signifies the percentage of labour force that is unemployed but are willing and actively seeking for work. Unemployment rate provides a precise measurement which was assured …show more content…

This may results in negative results of income, negative unexpected multiplier effects, oppression of national output, fiscal and monetary costs and merely social cost. The unemployed experiences a decline in the living standard. They have less purchasing power and may involve to debt problems which leads to social problems such as crimes. The unemployment also involves a loss of potential national output as the potential GDP exceeds real GDP; the output gap will be negative due to an increased in spare capacity. High level of unemployment will affect the fiscal costs. This is because government face a loss in tax revenue and higher spending on welfare for those who unemployed and this may cause budget deficit in the particular country. Negative multiplier effects happened due to the loss of large number of jobs during a downturn in the business which affected the other parties such as suppliers or retailers.
According to a Star job News, Malaysia unemployment rate was properly rising in May 2013 despite the domestic economy remaining in a relatively healthy state. Data from the Statistics Department showed that there were 439,4000 unemployed individuals in Malaysia in May 2013. This represented an increase of 35,800 persons (8.9%) from the preceding month, and 59,200 persons (15.6%) from May 2012.The increase in the number of unemployed individuals led to a higher unemployment …show more content…

Labour force is not utilized efficiently and other factors of production plants and the land factors are wasted uselessly. This situation would decrease real GNP achieved. This condition will reduce potential GNP lower than real GNP.
2. Unemployment wastes the aggregate production factors. It affects that firms are not validity to manage the productions. The negatives effect toward the national economy is that the budgeted production of firm will not be able to reach efficiently.
3. As the result of wasting aggregate production factors of the firms, unemployment will turn down and lower the current production of the firms, this situation will led to the impediment of economic growth in the future.
4. The subtraction of real GNP and it subtracts to the national income will affect the unemployment. If the amount of Malaysian populations increase annually but the unemployment remains constant increase, the income per capital will go down

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