Impacts Of Unemployment

In the article that I have read on unemployment, it gave knowledge about how the U.S. economy (2015) was expected to continue on its previous growth path and on into at least the first quarter of next year (2016). The GDP growth rate is expected to remain somewhat consistent in the 2.25 percentage range. There has been a decline in the unemployment rate (now at 5.5 percent). There is also minimal improvement in disposable income that have raised spending. Simultaneously, GDP growth has also remained indifferent due to cautious consumers who have squeezed by a small rise in wage rates. The continuous improvements in employment rate and increases in consumers ' personal disposable income have positively affected consumption and, subsequently, …show more content…
There’s a sum greater than 2 million people who receive unemployment funding, causing our country to go into an unemployment crisis. Importantly, unemployment is when there are individuals who are not yet working, but are actively looking for work. Unemployment effects the economy in several major ways. One way is by paying out unemployment claims to millions of people to help them sustain their lives. The government has sent over 300 billion dollars in unemployment claims, as well as other programs such as Medicaid and Food Stamp assistance. The government is unable to compensate the same level of income tax due to the unemployment rate. Income tax plays a vital role in the economy’s strength, as unemployment has a more negative reverse effect on the economy. To gather money to finance unemployment, the government has to increase taxes on companies as well as working individuals. Unemployment results in lowering GDP as companies would have to produce fewer products to meet the current low demand. The economy is negatively impacted by a lowered …show more content…
It can be self-perpetuating. The longer they are unemployed, the less attractive he/she may be to potential employers. I’d say that they’ve depreciated their potential value to an employer while sitting away at “Fort Couch” (home). Having a big gap between employments absolutely never looks good on anyone. When people are unemployed in large numbers, it hurts the rest of the economy, creating a cyclical problem (Spending). When people have less money to spend because of unemployment, other companies suffer from less consumer demand. Then, when companies suffer because of lost business, they might in turn be forced to make layoffs of their own, making the unemployment rate rise and overall spending drop even more (Spending). The cyclical effect of unemployment is the reason for government-issued economic stimulus packages. Logic suggests that when people have more money, they spend it, thereby stimulating the economy and simulating job growth