Unemployment is universally recognized as a bad thing. While economists and academics
make convincing arguments that there is a certain natural level of unemployment that
cannot be erased, elevated unemployment imposes significant costs on the individual, the
society and the country. Worse yet, most of the costs are of the dead loss variety where
there are no offsetting gains to the costs that everyone must bear. Among the effects of the
high unemployment rate in the United States are :
1. Maximum period for UI claims reaching new historical highs
2. Wears down the unemployed both mentally and physically
3. Affects economy growth rate
4. High rate of youth unemployment.
5. Increases in criminal offences
6. Employment of part-time workers versus full-time workers
7. Increase in poverty rate
1. Maximum period for UI claims reaching new historical
One of the effects caused by the US unemployment rate is the maximum period for UI
claims reaching new historical highs. UI means unemployment insurance which are social
welfare payments given by the state or other authorised bodies to unemployed people.
Depending on the jurisdiction and the status of the person, those sums may be small or big,
covering only the unemployed person basic needs, or may compensate for lost time
proportionally to the previous earned salary.
From a macroeconomics standpoint, economists state that unemployment insurance
programs act as an automatic stabilizer. When employment grows, program revenue
increases through increased tax revenues while program spending falls as fewer workers
are unemployed. This creates a surplus of funds for the unemployment program to draw
upon during a recession. In a recession, unemployment benefits tax revenues fall and
program spending rises as more workers lose their jobs and receive benefits. The increased
payments to unemployed workers puts additional funds into the economy as unemployed
workers receive funds to spend which help moves the economy.
2. Wears down the unemployed both mentally and physically
Another effect of unemployment rate in the United States is that it wears down the
unemployed both mentally and physically. It also affects people who have jobs as people
with jobs will be worried endlessly but for a good reason as they know they too could be
let go at almost any moment, while others cling to the jobs they hate because they’re
acutely aware that almost no one’s hiring at the moment. Some research has suggested that
job insecurity will usually provoke anxieties which can cause one person to have health
problems. Researchers have been researching regarding the serious effects of
