Q:

Why is unemployment important?

A:

Quick Answer

Unemployment is important because it serves primarily as a measurement of economic health on a local, state and national scale. Unemployment is studied and quantified as a measurement of economic health to demonstrate what sectors are most affected by unemployment as well as correlations between lower rates of employment and people of certain ages, ethnicity and socioeconomic status.

Know More
Why is unemployment important?
Credit: Geri Lavrov Moment Getty Images

Full Answer

Rates of unemployment vary on a virtually constant basis. Sometimes, unemployment is low for a short period of time and is limited to one or a few industries. Other times, however, unemployment rates are chronically high and are found in many industries. This is often caused by a larger systemic problem, such as an economic recession or depression. Unemployment rates are only one measurement of economic health. Other factors used to determine the growth or contraction of the economy include gross domestic product output, inflation, interest rates, stock market and exchange rates. These factors are generally evaluated by a variety of individuals including bankers, business owners, policymakers and financial analysts to troubleshoot economic problems and identify possible remedies. Low rates of unemployment signal good overall economic health. Low unemployment means that the majority of people are working and receiving incomes, which allows them to consume goods and services, which is essential to continued economic growth.

Sources:

  1. milmi.org

Is this answer helpful?

Similar Questions

  • Q:

    How does unemployment affect communities?

    A:

    Unemployment can have several negative effects on communities, including reducing the quality and availability of housing and reducing the quality of schools and limiting the variety and availability of jobs. Unemployment in communities can occur among a few individuals or affect large segments of the population. Sometimes, unemployment stems from other chronic and external issues, such as national poverty and economic recession, and can be either temporary or long term.

    Full Answer >
    Filed Under:
  • Q:

    How does unemployment influence and affect economic growth?

    A:

    Unemployment and economic growth are dependent on one another in many ways, and oftentimes unemployment leads to slower economic growth. Since unemployment is very dependent on economic activity, when economic activity is high there is increased production and a healthy demand for individuals to help produce higher amounts of services and goods.

    Full Answer >
    Filed Under:
  • Q:

    How do you stop unemployment?

    A:

    There are many solutions to unemployment, including government-funded training for workers and worker relocation to areas that offer jobs. Organizations like the Library of Economics and Liberty argue that the elimination of social welfare programs would actually reduce unemployment.

    Full Answer >
    Filed Under:
  • Q:

    How do you solve unemployment?

    A:

    Solving unemployment may include decreasing unemployment benefits, getting rid of minimum wage, increasing work benefits and insisting all people get a job. Germany did all of this and experienced a sharp decline in unemployment.

    Full Answer >
    Filed Under:

Explore