Often there isn 't enough production to keep the workers busy. Over a period of time, the economy experiences many ups and downs this causes unemployment.
During the Great Depression, for example, the unemployment rate surged as high as 25%. That means one out of four people were willing and able to work, but could not find work! Eventually, unemployment came down again. As you can see, at least part of unemployment can be explained by looking at the cycles, or the ups and downs of the economy. Precisely every unemployed United States citizen are eligible for unemployment insurance takes money from the economy other than adding to it. Due to them been a U.S. citizen they are entitled to a certain amount of money from the government. Paying unemployment benefits to our citizens increases the states’ deficits and tax revenue. This puts the economy in a downward spin and could cause even more unemployment. The state will have to raise taxes to compensate for the loss of the tax revenue that is not been paid due to unemployment. A ripple effect could happen forcing the employed and unemployed to loss deposable income, and keep less money from been spent in the economy. Adding to that the real estate market falls according to studies 45% of mortgages fall into foreclosure as an open result of unemployment, consequently as the unemployment rate raises, foreclosures will go up as