Causes and Effects of Unemployment

Topics: Unemployment, United States, Macroeconomics Pages: 3 (1129 words) Published: November 22, 2011

Causes and Effects of Unemployment
Unemployment rate is the litmus paper of a country’s economy, security and its overall production force. The more unemployment rate increases the more consumption rate decreases. Since many people are unemployed, their spending power struggles causing the economic wheel to stop rotating. High Unemployment rates indirectly induce a widespread of insecurity within the general population. Unemployment, which caused by many factors has had a painful impact on both social matters and American economy. Its effects stay for a long periods and are widespread. To understand the depths of unemployment and how it affects regular citizens, it needs to discuss on the factors that caused high unemployment rates and the impact of unemployment on American society. To begin, unemployment was a problem that faced every civilization throughout history; the root however was different from one setting to another. In the United States the root of unemployment can be traced back to major companies moving overseas. Before the recession, many prominent companies synchronized their relocation plan and moved out of the United States into other countries where employment was cheaper and the market is less regulated. This was the root cause of the trouble which made many people unemployed. Immediately the unilateral decision of the companies caused stressful living standard on many employees who lost their primary source of income. For example, many of these people were kicked out of their living places after they could not able to pay monthly rent. Also many of them lost their health insurance, which they used to get through their employers. The decision that companies reached in order to make more profit caused painful consequences on American people and causes the recession that still haunts our economy. Moreover, housing construction and service industry jobs which most of American people used to earn money had completely...
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