As of May 2017, the unemployment rate is 4.3%, the lowest it has been since 2001 (Gillespie, 2017). Along with an increase in wage earnings over the past 12 months, many economic experts are hopeful that these gains will continue following a sluggish first quarter of 2017, with employers adding less jobs than expected after several years of job gains. Ana Swanson for the Washington Post notes that this economic rebound is a welcome surprise after said slow gains in the first quarter of the year. As the U.S. economy continues its comeback following a recession that ended just eight years ago, we’re being asked the question: what is the cost of unemployment for the U.S. and the individuals struggling to find work?
From an individual standing, being unemployed can have lasting damage on one’s mental health, as unemployment has been cited as the source of stress, anxiety, and depression for those looking for work but are unable to find it. Also, there is the obvious correlation of unemployment to financial hardships, as many unemployed people are forced to get minimum wage jobs or part-time jobs for which they are overqualified. Overqualification can lead many in these positions to experience the negative mental health effects mentioned above.
On a more macro scale, unemployment can have further damaging effects on the U.S. economy. More unemployment means less spending and investing, which can have huge effects on small businesses. Due to unemployment rates, governments find themselves responsible for more food stamps and welfare benefits. Also, with higher rates come higher government payouts for unemployment and buyouts for companies that have filed for bankruptcy due to lack of production. This lack of production can also be linked back to unemployment because with less jobs come less money to spend which leads to companies going bankrupt due to lack of sales. From both macro and micro views, unemployment ends up costing the U.S. more in the long run and it one of the biggest factors in the downfalls of the U.S. economy. If the government does not strive to add more jobs to the market, as well as finding qualified people for those jobs, then we could see more damage done to economy as well as payouts and buyouts to save companies that find themselves suffering as well.
- Gillespie, P. (n.d.). U.S. unemployment hits lowest level since 2001. Retrieved July 05, 2017, from http://money.cnn.com/2017/06/02/news/economy/may-jobs-report-us-economy/index.html
- Swanson, A. (2017, May 05). Unemployment rate drops to lowest level in a decade in April as economy adds 211,000 jobs. Retrieved July 05, 2017, from https://www.washingtonpost.com/news/wonk/wp/2017/05/05/the-u-s-job-market-is-expected-to-rebound-in-april-if-it-doesnt-that-could-be-cause-for-concern/?utm_term=.eb1835f615da