Question

How does unemployment affect economic stability?

Answer 1

The labourers are exploited because of unemployment. They must tolerate low pay, and they must work under poor conditions.

Due to unemployment labor disputes occur. It is having adverse effects on relations between employer and employee. Unemployment is growing, leading to labor disputes. The nation is in a state of political turmoil due to unemployment. Unemployed people engage in destructive activities. They consider governments as useless. Under conditions of political instability, economic development gets tough.

Owing to unemployment, many social problems such as dishonesty, corruption, and immorality etc. emerge. It endangers the country 's status of law and order. It is creating social unrest within society.

Under the unemployment situation a man doesn't have a source of income. Unemployment causes deprivation. The debt burden is on the rise. Economic problems are getting bigger. Human resources go waste, because of unemployment. Labor power is not used constructively. When good use is made of human capital, the country's economic development will improve.

Higher unemployment will lead to a fall in tax revenue due to fewer people paying income tax and also less spending (hence lower VAT). The government will also have to spend more on joblessness and related benefits. Not only does the government pay unemployment benefit, but a family that has unemployment will be more likely to receive housing and income support.

Rise in social problems. High unemployment areas (particularly youth unemployment) tend to get more crime and vandalism. It may lead to isolation and difficulties in the social integration of young unemployed people.