Costs of the Unemployment

Costs of the unemployment are high in any society. The unemployment causes some manpower resources waste. The unemployment causes the production scale to dwindle. The government revenue reduces. Economy declines. The expenditure of social welfare increases. The financial burden is aggravated. The unemployment makes people's income reduce. The unemployment makes the unemployed suffer poverty and spirit pain. In addition, the too high unemployment rate will also influence the stability of society, and then bring about other social problems.

However, the largest cost of unemployment is that causes the reduction of gross national product. The unemployment rate increases 1%, actual gross national product will reduce 2.5%. In other words, if want to let the unemployment rate reduce 1%, then gross national product must increase 2.5%. This is Okun's law. Though the costs of unemployment are expensive, it is unavoidable in any society!


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