Unemployment


	Unemployment
	Advantages Low wage rates - Reduced power of workers to bargain for higher wages/salaries Reduce inflationary pressure Reduced environmental damage	Disadvantages Waste of resources/opportunity cost of lost potential output (PPF) Less economic growth Redundancies waste resources invested in training & education. Hysteresis effect - Longer the person is out of work, greater the loss of skills/motivation -> less incentive to find a work, become reliant on state welfare -> rise in structural employment and natural rate of unemployment Worsens Government finance - Increased benefits i.e. JSA and decreased income tax, national insurance & VAT revenue = budget DEFICIT. Higher crame rates, divorce rates, poorer health & lower life expectancy Falling real incomes -> widening income inequality gap Financial worries -> mental health issues, breakdown of relationships & even suicide.
	Evaluation

Waste of resources/opportunity cost of lost potential output (PPF)
Less economic growth
Redundancies waste resources invested in training & education.
Hysteresis effect - Longer the person is out of work, greater the loss of skills/motivation -> less incentive to find a work, become reliant on state welfare -> rise in structural employment and natural rate of unemployment
Worsens Government finance - Increased benefits i.e. JSA and decreased income tax, national insurance & VAT revenue = budget DEFICIT.
Higher crame rates, divorce rates, poorer health & lower life expectancy
Falling real incomes -> widening income inequality gap
Financial worries -> mental health issues, breakdown of relationships & even suicide.

Comments

Report Mon 16th October, 2017 @ 19:24

I found this extremely useful thank you!

However, there are a few spelling mistakes here and there that may possibly confuse beginners to economics.

Like in disadvantages-

4th point-

"rise in structural employment and natural rate of unemployment"

Should really be structural un-employment.

Report Wed 21st March, 2018 @ 18:52

Extremely helpful. Thanks a lot!. some typos but I understand

Comments