The Devastating Effects of Unemployment on Individuals and the Economy

The continuing rate of unemployment not only continues to cripple the economic standing of the nation but it also poses hard-hitting and greater effects to the people, most especially in their psychological and bodily wellness. This fact is evident on the rate of deaths unemployment has caused to a great number of people over the past years. Most victims of unemployment died due to heart attacks. Unemployment also pushes people to go over the edge and commit crimes, putting people to state prisons.

Others lack the psychological capacity to handle the stresses and pains of unemployment leading to insanity and other mental illnesses. The result is the influx of people admitted to mental hospitals and the rising number of mortality caused by suicide. On the economic level, unemployment lowers tax revenue but at the same time heightens the nation’s expenditure due to the need to spend on social welfare programs for unemployed citizens. 2. What are the costs of inflation?

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The negative effects of inflation are less detrimental than the costs of unemployment. This scheme is due to the fact that the effects of inflation can be stabilized through the implementation of fitting policies or programs. Doing so would alleviate the consequences of inflation. To achieve this objective, there is a continuous monitoring for the ratio between the rate of fixed income and the rate of inflation. The government has already implemented a program called the Cost of Living Adjustment (COLA) to realize this end.

Moreover, the cost of inflation has moved on to another level where it also takes great effects on housing. Banks do avoid the possible effects of inflation in the future by requiring people in the present to pay for an increased rate in mortgage. This leads to a decline in the number of people who buy lands and houses. Other costs of unemployment have proven to be insignificant and less damaging to the economy and the people. For instance, the shoe leather cost. 3. Who bears the burden for each of these macroeconomic scourges?

In any case, ongoing unemployment or inflation, the people of the nation suffer the most. The citizens, most especially feel and experience the demands of these macroeconomic scourges. For instance, in the relationship of inflation and unemployment, it was stated in the article that a flourishing economy tends to lower the rate of unemployment, as the business sector would look to employ a number of people due to the demands of the growing economy. When this happens, employees would look forward to salary increases and added benefits.

If firms and business establishments do so, they would reclaim the finances they lost to the salary increases and added benefits by increasing the prices of commodities and services. In this scenario, it is evident that the people would bear this burden as they are forced to pay for their needs and for services alike on a higher cost and value. If, on the other hand, the economy slows down, there would be a high unemployment rate. The prices of commodities and services would be on the parallel, but as mentioned above, unemployment would lead to higher crime rates, mental illnesses, and deaths.

4. Which one do you fear the most? It is evident that both unemployment and inflation pushes down the standing of the people in society. They endure the effects of these macroeconomic circumstances that plague the nation. However, since the facts of the costs of inflation and unemployment are stated above, the one that I fear most is unemployment. Unemployment harms the people as opposed to inflation where it can still be stabilized by the government.

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