What are the disadvantages of unemployment?
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Answer:
Waste of resources/opportunity cost of lost potential output (PPF)
Less economic growth
Redundancies waste resources invested in training & education.
Hysteresis effect - Longer the person is out of work, greater the loss of skills/motivation -> less incentive to find a work, become reliant on state welfare -> rise in structural employment and natural rate of unemployment
Worsens Government finance - Increased benefits i.e. JSA and decreased income tax, national insurance & VAT revenue = budget DEFICIT.
Higher crame rates, divorce rates, poorer health & lower life expectancy
Falling real incomes -> widening income inequality gap
Financial worries -> mental health issues, breakdown of relationships & even suicide.
The disadvantage of unemployment are :-
→Waste of resources/ opportunity cost of lost or potential output (PPF).
→Less economic growth.
→Redudancues waste resources invested in training & education
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