Unemployment Causes and Consequences

Jodee Redmond
Unemployment is a complicated issue.
Unemployment is a complicated issue.

Understanding unemployment causes and consequences can bring home what a serious problem job loss can be for the individuals who are affected and their families, as well as society as a whole.

Understanding Unemployment Causes and Consequences

Causes of Unemployment

There are many reasons why someone who is able to and wants to work may be without a job:

  • Performance issues

If a person lacks the skills to perform their duties on the job, is tardy or absent from work often, or is involved in personality conflicts with co-workers or management, he or she may be let go from employment.

  • Economic conditions

In a situation where a company needs to cut costs, it may decide to offer employees an incentive to take early retirement or lay them off altogether. A person on temporary layoff from work and waiting to be recalled back to work can be considered unemployed.

  • Mismatch between available workers and positions to be filled

When there are more workers available than positions to be filled, unemployment rates for will rise. When there are positions waiting to be filled, but available workers don't have the necessary training or skills to do the jobs, unemployment rates will be higher than when there is a surplus of available job openings compared to people looking for work.

  • Lack of experience

Unemployment rates among young people tend to be higher than for other segments of the population. This is due to a lack of experience which makes it more difficult for them to find jobs, and they can't gain the practical experience they need unless they can find someone willing to hire them.

  • Voluntary unemployment

There are some people who are between jobs because of choices they have made. They may have resigned from a job in anticipation of a move to another location before they have another job lined up or be planning to return to school.

Consequences of Unemployment

There are several consequences of unemployment that you need to be aware of. They range from those that affect the individual and his or her family to those that have an impact on the economy as a whole.

A person who has recently lost his or her job may first be in shock at what has happened. All of a sudden the individual doesn't have the regular routine they had when they were working. Unemployed people may have concerns that their current situation may mean that they will not be able to find another job. Mixed in with the feelings of shock may be concerns about being able to meet their financial obligations until they are able to find work again.

If the job search takes a long time or the person doesn't have savings or other resources to tide them over until he or she is once again in the workforce, the situation may be very stressful. In addition to going through the steps involved in looking for work, the person must also try to find a way to meet current financial obligations, often with very limited resources. Job loss can result in strained relationships and increased stress for the unemployed person and his or her family.

When there is work available but not enough trained personnel to perform it, then productivity goes down. Companies may lose money because they are not able to serve their customers properly. Their clientele will go elsewhere if they feel that their needs are not being met. The workers that are employed at the company may be overburdened from excessive employment demands, and be prone to taking extra time off from work or burnout.

As you can see, understanding unemployment causes and consequences involves more than looking at the individual who is between jobs. Unemployment has a far-ranging effect on many parts of society.

Unemployment Causes and Consequences