Costs of Unemployment
By Michael Mizia
Unemployment can cause many people to lose hope that they wont be able to afford anything anymore. But the one thing people do not know is that even being unemployed can cost a nations government hundreds of thousands of dollars in helping unemployed citizens. According to economicshelp.org, those who are unemployed find it more difficult to get work in the future(known as the hysteresis effect). Citizens who become disinterested in wanting to find work again will cause the government multiple problems as well as themselves. When people get fired or laid off from their jobs, they will most likely become depressed and won’t want to do anything for the first few days of being unemployed. This can cause stress as well as health problems to the individuals. Not only people, but a nation itself can suffer from suffering from unemployment. Having people who are out of work means that a nation’s economy is suffering from a lower GDP than they would if they had no unemployment. A lower GDP for a nation means the economy will be below full capacity this is inefficient and will lead to lower output and incomes.
The government struggles to support so many unemployed americans. According to money.cnn.com, unemployed Americans have cost the Government over half a trillion dollars in unemployment benefits within the last five years. Americans who continue to stay unemployed are just causing the government more trouble by driving them further into debt while trying to help the people who need money. Referring back to money.cnn.com, a study was conducted where the many unemployment programs were extended to see just how much money was going to be spent and upon doing so they found out that by hypothetically increasing how long these programs last the nations GDP would rise by 0.2% and 300,000 jobs would be added
According to a website titled whitehouse.gov, Since its inception in 2008, extended unemployment insurance (UI) benefits have provided critical support to millions of workers and their families. Allowing the unemployment insurance to run out would damage the economy even more than it already is. Failure to extend the unemployment insurance would cost an estimated 240,000 jobs in 2014. Lifting people out of poverty comes with a cost, although the government is saving people from starving and losing everything, they still suffer because they are taking money out that they won’t be able to repay to make sure people are able to continue their lives on a day to day basis without having to worry about money.
In the end, although unemployment can happen to anyone at any time don’t let it frighten you, having jobs open up allow an economy to prosper because there are always people looking for work.
Correct me if I am wrong but, doesn't Social Security also help with unemployment? If so then what other programs are there that help people from unemployment?
ReplyDeleteI was interested in this post, because I had recently wrote my "Health of the Economy" on teenagers of our generation facing one of the toughest job markets since the post World War II era. So obviously unemployment is a really crippling problem for all ages in our current economy. However, I had never considered how it effected the government. Obviously, it effects the people who are laid off, but I never thought about the monetary effect on the government. Thanks for the share!
ReplyDeleteA big problem with unemployment is not just the numbers of people that are unemployed, but how long they've been unemployed. A lot of people have been out of work for years now, and when it's been that long, it makes it much harder to find work. I think a good idea would be to have some programs that find jobs for people who have been out of work for a year or more, because they need a job the most.
ReplyDeleteThis is a great topic to write about. I have to reply to Greg's comment because I have never thought about unemployment in that way but it is so true. When people are unemployed for an extended period of time they become less attractive to potential employers which is a "side effect" of national unemployment. It clearly effects the government and their fiscal policy but fiscal policy cannot account for these "side effects".
ReplyDeleteWhen people receive unemployment benefits they feel more secure and no longer worry about their situation because they now have stability. That however, can sometimes be a problem. If people do not feel urged to find a job or don’t have motivation to earn their own wage, they will not go out and find work. While this is not everyone, there are always some freeloaders who would rather just seek government benefits than find a job. This puts a tax burden on others and causes the government to fund people who are using the entitlements for the wrong reasons.
ReplyDeleteUnemployment is a very touchy subject to many Americans today. People often think that once they get laid off they do not really have a chance to get another job in the near future. Because of this, even when jobs open up, man people are not taking advantage of this to get themselves back into the work force and which would help boost the economy by bringing more money to the market. Bottom line, people should not be scared about re-entering the job market even if they have been unemployed for an extended period of time.
ReplyDeleteIt was interesting to see the affect that unemployment has on EVERYONE, not just those without a job. It makes sense when you think about it though: a good amount of our taxes goes to help those who aren't making as much or aren't making anything at all. And the more of those types of people there are, the more we are responsible for supporting. Personally I think that more should be done to get people jobs because the more people we have contributing to society, the more economic growth will follow. Unemployment, even if you are not directly effected by it, drags everyone down.
ReplyDeleteI never really thought about how unemployed people can cost us the government money but now that I think of it that makes sense. So many people come into grocery stores and they have food benefits and ways of payment related to that. It's sad to see how many people suffer from unemployment but I do not believe the government should help out. It only puts the nation farther into debt. A half trillion dollars is a lot of money.
ReplyDeleteI don't know I agree with the fact that once someone gets laid off that they won't want to get another job. I'm sure that there are tons of people who are trying their hardest in order to try and get a job but they can't get one. It's not that they don't want a job and just want to live off of the government but that there is no jobs for them. I agree with the fact that it could be scary and everything but most people would like to work and get money and be able to but things that they want instead of just only being able to buy food or pay for an apartment. I also agree with Greg and I think it would be awesome to have a program like that so that more people could get back into the work force if they were afraid.
ReplyDeleteI agree with Saige in some ways on how its hard to find a job because there's not many opportunities unlike in the late 1940's there was many because of the war I believe that although its hard to get a job it is possible I just think that the people that are unemployed aren't trying hard enough, where we live there are lots of opportunity's for us then other country's
ReplyDeleteI agree with the hysteresis effect because most all jobs now require experience, so if you don't get experience when you are younger, you will have a harder time getting employed after secondary education. The demand for high level jobs in the future will rise with the Baby Boomers retiring, but there will not be enough qualified candidates for the jobs because those jobs require years of experience.
ReplyDeleteI never would of guessed that the government is losing that much money by helping unemployed citizens. I agree with Eric, so may people can live off food stamps which is sad to see, and I like seeing the government help. Overall, citizens should not be worried to enter into a new work area because they got laid off before hand. They need to keep trying and without trying you won't find a new job.
ReplyDeleteI disagree with Melissa's assumption that "those who are unemployed aren't trying hard enough"; yes, there are lots of jobs, but a lot of them require college degrees or several years of experience in the field. For someone who's unemployed, both these things are incredibly difficult to obtain. It's easy for us, as privileged middle-class kids, to look at someone and say they're not trying hard enough, because we have plenty of opportunities basically handed to us on a platter. It's another thing entirely for the lower classes, who are usually stuck working minimum-wage jobs (if they're able to find any jobs at all), which usually can't support them financially anyway. Our welfare programs are actually incredibly sparse, with people even having to skip meals and other opportunities to make their money last them through the month.
ReplyDeleteWhile unemployment directly affects those who do not have jobs, it also affects the economy as these people do not have money to spend therefore reducing the demand for goods. In turn, employers are not able to make as much money reducing the GDP. Unemployment which is only those actively seeking jobs affects many Americans, however is a dilemma. Many who feel the affects of unemployment and low level jobs seek a raise in minimum wage, however this would increase unemployment as employers can hire less workers for the same amount of money. Overall unemployment is an issue with no clear solution.
ReplyDeleteThere will always be an unemployment rate. In one of our assignments I found out that 60% percent of people under the poverty line don’t try to find work. The economy will always be hit by it no matter what. Until we find a way to make sure that everyone is working, unemployment will hit us hard.
ReplyDeleteUnemployment is something that most people don't want to think about let alone research because of how devastating it can be for some families, but I am glad you chose this topic because it really shows how it really effects us as a whole, it also makes it mush easier to understand when we have clear cut numbers to help explain whats really happening and how important it is.
ReplyDeleteUnemployment is never a place most people choose to be. It is difficult especially in the current economy. The number of people out of a job is high but it doesn't seem to mean they are all trying to find a job. There are a certain percent of the unemployed that don't even bother finding a job especially since unemployment has been extended so long. They are better off taking unemployment instead of looking for a low paying job just because that is all they can find.
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