Unemployment
Introduction
Unemployment produces a number of negative effects on individuals and on society. Unemployment refers to those individuals who are not in employment, yet are actively looking for work and available for work. Being unemployed does not mean you are worthless. People become unemployed for a number of reasons, including downturns in business, technological change, career change and seasonal decreases in demand for workers. In this chapter, we look at what issues an individual deals with when unemployed and what issues unemployment creates for all of us as a society. See image 1
Individual costs of unemployment
There is a range of individual costs of unemployment. In general, someone who is unemployed for a even a couple of months can worry that they might not find another job. The anxiety, uncertainty and worry that unemployment causes can be very stressful on individuals and their households. In a situation where unemployment becomes extended (long-term), individuals can develop more serious health problems due to the stress of unemployment, such as depression and low self-esteem. See image 2
When unemployment persists or lasts for more than a brief time, many individuals and their families are placed under great financial stress. Poverty is a serious socio-economic problem where an individual can't earn enough money to meet their basic living needs. Perhaps the most tragic outcome of poverty, financial stress and poor health is when these negative effects make an unemployed person homeless. Homelessness affects society as well; we look at this issue below in 'Societal costs of unemployment'. See image 3
Long-term unemployment can produce other negative effects on individuals. When an individual is unable or unmotivated to keep their skills developed, for example, typing proficiency, or learning how to use new computer software, this can decrease their chances of finding a job. Skills-related unemployment can easily occur, because skills are more easily developed and updated when you are in regular employment and training because many employers keep employees' skills updated 'on the job'.
Further, when people remain unemployed for long periods of time, they can experience discrimination from unsympathetic people. When people are treated unfairly or nastily due to their unemployed status, this can add to an individual's negative experience of unemployment. An unemployed individual can be ignored or ridiculed at social outings or treated poorly by people who think they are lazy and useless because they are unemployed by choice. All these individual costs of unemployment can seriously damage a person's health, self-esteem and future job security. In this situation, unemployment creates a number of negative effects and costs on society.
Social costs of unemployment
As individuals, we all make up 'society', so we all deal indirectly with unemployment. Unemployment creates a number of social costs. Most of us are lucky to be in employment and we pay income tax so that our governments can help the unemployed (through welfare payments such as the Newstart allowance and employment training programs). When the unemployment rate grows, the more tax we pay for welfare payments/unemployment benefits, so the financial burden on society grows. No one likes paying tax, so an unfortunate consequence of higher taxes tends to be higher levels of resentment. Pressure is placed on governments to reduce unemployment for economic reasons and political reasons. The strain on wage earners can add to their financial security, which in turn may lead them to vote against the government of the day as 'punishment'.
There are clear strains on families from unemployment. When a family member is in long periods of unemployment, there will be great pressure on other family members to provide financially. A typical household experiencing poverty will have no adults in employment and rely on welfare payments. An unemployed household experiences boredom, frustration and health issues. Also, an unemployed household may have to relocate in search of work, which adds to stress levels and disrupts children's education. Being without a job disrupts a family's pursuit of a decent lifestyle and a healthy future.
It is indeed a 'cost to society' when our governments don't try hard enough to find work for the unemployed. Full employment should be a goal for governments, to both improve the economy and to halt the individual/social costs of unemployment. At present, many employers tend to make their employees work longer hours rather than hire new workers. Also, many businesses hire labour on a casual basis or 'contract out' to hire companies or sub-contractors, rather than take on capable workers from the unemployed group. Governments must create more incentives for businesses and employers to hire unemployed workers, who are often skilled and keen to work hard.
Homelessness and crime are serious social problems often caused by cycles of unemployment. A nightmare scenario involves a person facing long-term unemployment, leading to homelessness through factors such as a mental health breakdown, financial crisis (such as being unable to pay the rent), gambling and drug problems, and/or a relationship breakdown. People who face long-term unemployment are placed under increasing financial strain over time. Often a 'quick fix' is found in crime. We all 'pay' when money and goods are stolen, due to our society's inability to help our most desperate unemployed people.
