To anyone who suffers from unemployment, this would be a hard time for them in order to support their living. However, an economist is looking at unemployment is a necessity to maintain a balance economy. Therefore there are advantages and disadvantages of unemployment in a country. The disadvantages of unemployment are as clear as water to most people in the society even if they did not study economy. Deprived of a job meaning lacking of income, if the society is jobless eventually affects the healthy economy due to insufficient money to spend. Therefore, it will also affect the demand and supply of goods and services in the market, insufficient money to pay tax, and often requesting financial help from government such as food coupons and monthly income. Moreover, in economy point of view is usually seen as economy downturn in the country itself. The reason behind this situation is due to economic delinquent that influences the entire country. This also causes many workers lose their jobs and unable to sustain their life and it is protracted the whole economy of one country. Next, high unemployment rate in a country not only bring disadvantage for those who suffered from unemployment and creates a big economy downturn. However, it is a problem for employee who is still working inside an organization. This is because it becomes an encumbrance as long as the money for government facilities in the way of taxes, cascade tremendously upon those laboring when huge numbers of people are still unemployed. Moving forward, there are advantages of unemployment in a country too such as from the perspective of an employer, a high redundancy generate benefits. For example, it brings them an extensive of candidates for jobs interview which is available, and it helps to lower down the quantity of salary that an employer needs to offer their workers. In economy point of view, high redundancy generates a labor surplus. In addition, unemployment pushes people to scrutinize how people spend their money, it enables an economy to circulate workers to diverse parts of labor force. Plus, fading industries and organizations lay off employees, end up being employed in other industries which potentially growing. Jobless people end up observing their expenditure and quit spending on those unnecessary things such as magazines, travelling membership and direct sales product. Moreover, unemployment might influence people to further their studies to higher education such as degree, master and professor level. This situation helps economy in the long run by maximizing a person’s knowledge, experience, thinking and skills. The most vital of all, unemployment accumulate new entrepreneurs who create chances for themselves to start earning from business strategy and no longer depend on employers. This is a way of new companies and market is formed and enhances innovation in the market. Accumulating new business partners is an advantage that generates more new jobs.
How to solve unemployment problem.
One of the ways to solve unemployment in a country is by fiscal policy. This means that the government might increase or decrease the percentage of taxes in order to encourage economy. Lowering taxes is a similar way to lowering interest rates and it provide customer to spend more when they have more savings in their account, eventually accumulating demands. Moreover, it also helps to decrease cost for businesses, which empower more cash to invest into their business and employ more people to work. While government expenditure can be in the project form where hiring workers to involve in government sectors such as government services, building new facilities and hospitality sectors. The way of lowering taxes encourage more people in the society to spend and increases demands and supply in the economy. Another way to solve unemployment is by monetary policy. Monetary policy enables more households and businessman to have a loan in order to buy things that they want and expand their business to another level. Invigorate demands to make the whole economy back to balance. Lower interest rates enable entrepreneurs to have loan for less, and helping them in a way of capital to increase employment and meet rising demand. Lastly, side supply economics is also a way to decrease unemployment rate in a country by intensifying customer demand through greater government expenditure, advocates of supply side economy dispute that job opportunities created by suppliers. Private sectors are able to bring more jobs to the market is because the more production is building, the more human resources is needed to produce a unit of product. Empower suppliers of hiring more people to increase the production, reducing taxes enhancing suppliers to produce more goods. Therefore, unemployment rate is decrease and everyone is earning and increases their living standards.
Morgan Drake Eckstein (11 August 2009). Economic theory, advantage and disadvantage of unemployment. [ONLINE] Available at: http://voices.yahoo.com/economic-theory-advantages-disadvantages-unemployment-4045389.html?cat=3. [Last Accessed e.g. 13 July 2014].
Kimberly Armadeo (). Unemployment Solutions. [ONLINE] Available at: http://useconomy.about.com/od/suppl1/p/Unemployment-Solutions.htm. [Last Accessed 13 july 2014].