Discuss Whether Unemployment Is Bad for an EconomyUnemployment is the amount of people who are willing and able to work but do not have a job. Unemployment is considered detrimental for an economy because as a result lost output occurs. This means the economy is not at maximum output and thus not at full capacity. As illustrated in the graph there is also a negative output gap because people have less wealth, so have not as much income and thus there is less output and decreasing levels of growth. This is bad for an economy because if it does not grow then it is more vulnerable to a recession and unemployment will increase even more because people are not required to increase output. Thus, the government have dwindling economic growth which is not secure.
In Summary, the graph below shows that a large part of the fall in manufacturing employment is tied to stagnating wages and the economy is actually in a recession. If we look at the US economy by historical data, then the recession was a direct result of the Great Recession, and thus unemployment was at least about 3%. This is what means the United States is on a downward slope and will not grow much unless we grow even more. The economy will have to continue making an effort to stay productive, meaning less money going to business to pay back bills, which means job losses will be bigger, which means wages will be less, and so on as manufacturing prices will increase and so forth. As a result the bottom line for the economy will actually be a lot lower, although the economy will begin to grow with an even greater amount of money coming out of it. The U.S. Treasury has to keep borrowing for the economy to go, and as of now it cannot borrow. All of this would be a disaster if, as of now, every country was paying the same and we had to continue to pay as much as we could on debt to get money back. That is the only direction you have to go. As the graph shows this is all on the back of deflationary pressures in US currency to prevent a downturn, which means the dollar will fall and the entire Eurozone economy will be in recession.
The Bottom Line for the US
This means the economy needs to be growing steadily in order to get the minimum wage to $10 per hour. That will be a lot faster than a recession, and if that rate were to go and it did not the US dollar would experience deflationary pressures. I do not think this is the solution you need, but we have had the Fed do that too many times and the rate of dollar weakness has been greater than at any point in US history. When you look at U.S. government economic data such as the most recent numbers I mentioned on this topic, the U.S. recession was still well off even before the crisis started. By the end of the recession they started raising interest rates faster than they had been in almost 100 years. In some ways this has had a financial negative effect on the economy and the Fed’s role in the economy has been to make sure that there can be no additional Fed stimulative forces that interfere with the economy’s growth. The US Government has not been able to do that because they had to have an all time low interest rate program of some sort, which I believe would’ve done a huge amount to encourage the recovery. In reality, the Fed’s actions in boosting interest rates had the opposite effect and have done little to alleviate the financial crisis for the US and Europe. We must not turn our backs on the US Fed that did the bidding of the Fed with its policy of low interest rates.
Capital goodsAConsumer goodsNegative output gapAlso, unemployment is bad for an economy because it increases the budget deficit. This is when government spending is greater than the government’s income via taxes. As unemployed people do not pay taxes, because they don’t have a job, they do not contribute to the maintenance of the NHS and schools and other public services. This creates an opportunity cost for the government as they have to decide on what area(s) should receive funding as not all areas can get funding as there is not enough money. This means some services are less well maintained. In addition, unemployed people spend less so the government receive less VAT returns. This increases the opportunity