Social Consequences Of Long Term Unemployment - Essay Example

College: Social consequences of long term unemployment Employment whether self or formal, is very important in the general wellbeing of an individual. This affects both the social life as well as the country’s economic stability. An individual is able to access quality services and able to afford the best life and luxuries that accompany high purchasing power. It is apparently clear that the ability to take huge risks thus amassing more wealth, is hinged on the level of income an individual has at his/her disposal. However, this is thwarted by lack of finances occasioned by unemployment especially long term based. According to Jackson and Crooks, (1993), the atmosphere and environment of unemployment relegates an individual to just existing rather than live. This statement captures how corrosive and disastrous unemployment can affect an individual and the society where unemployment is thriving. Machin et al, (1998), notes that long term unemployment as impacting on the loss of competitiveness in the labour market, thus leading to more unemployment rate in the economy. Moreover, this has a consequence of causing huge income disparities as it becomes quite challenging to competing in the job market as the individual’s skills and competencies that were acquired at any moment end up deteriorating with time due to lack of use. However, Helmut, (2000) paints a grin picture of the social consequences which result from long term unemployment. Unemployment, in a broad sense creates a vicious cycle of poverty that normally leads to the following social consequences that have in them a spiraling effect on the social and economic costs. These in turn, lead to harsh financial hurdles, corrosion of family ties and breakdowns, unserviceable debts, crime in order to survive, social exclusion, dwindling of self esteem and loss of confidence, homelessness and poor health, inaccessibility to quality services, depression and redundancy as pertains to work skills and competencies. Although unemployment may act as an impetus in causing economic action by governments, lack of proper policies may contribute to harmful consequences on the social as well as economic wellbeing of an individual and the country’s employment. Rebecca, (1994), argues that inefficient labour market fuels socio-economic challenges consequently leading to long term unemployment. With the existence of continued unemployment, the individuals get socially excluded. In addition, their economic capability is weakened. Individuals who are faced with long term unemployment effects find it challenging to live. They are forced to borrowing finances in order to survive. Since there are no sources of cash inflows, servicing of the debts become a hurdle. This is especially so with lone parents and those whose education is low. They lack the ability to compete with the increasing demands on the labour market as advanced skills are required to perform the jobs. Moreover, the consequences are so manifest on the young people. These bear the greatest brunt as adjusting to the labour market needs becomes quite challenging. Getting the necessary professional polishing by way of experience proves to be a herculean task as the transfer of skills is limited. Consequently, borrowing becomes the norm, creating a cycle of dependency resulting from lack of financial independency. The spiraling effects of long term consequences of unemployment, lead to deterioration of family ties and breakdowns as the financial instability cripples the purchasing power of the families. This results into confrontations as needs become quite elusive to cater for. The couples at this point may turn to securing financial aid or other sources of help through uncouth means such as prostitution or even drug trafficking. These in consequence contribute to infidelity as well as prosecution, leading to separation of families or divorce. The embarrassments caused by such actions lead to weakening of the social fabric and family ties. Furthermore, this contributes to emotional drain and thawing of self esteem and confidence. The deterioration of an individual’s value further contributes to inability to secure employment as confidence, hope and initiative get lost. Consequently, the vicious cycle of poverty gets fuelled. As unemployment persists, needs become a challenge to meet. With the absence of proper social welfare mechanisms, crime becomes an alternative through which meeting of basic needs can be catered for. Moreover, the hopeless scenarios combined with social exclusion occasioned by behavioral deformations resulting from frustrations of unemployment, creates callous behaviours and insensitivity. The result is ruthless crime acts that create social anarchy and increase in social costs that may have corroding effects on economic gains. Furthermore, the endurance of long term unemployment contributes to waning of professional skills and competence. The depreciation of the skills occasioned by the lack of exposure and grooming, causes the unemployed to lose opportunities in the labour market especially where the economic growth rate underperforms compared to growth rates of the labour force. In addition, inefficiencies in the labour market may also aggravate the problem further as mechanisms to regulate the sector are incapable of dealing with ever changing needs in the market. The inefficiencies create unfair competition which in most cases work against the young energetic and fresh people as well as women. This leads to wide differential wage gaps and diminishing of social order due to frustrations. Research by Helmut Wagner also pointed to a conclusion that unemployment and poverty are the twin germ of social evils such as corruption and poor governance. For instance, since its inception, Transparency International has given statistics to prove that there is a strong correlation between poverty index and corruption index. Furthermore scholars concur to the verity that unemployment results into inapt allocation of factors of production to various sources of the economy, thus causing poor economic governance. However, there are various theories that explain unemployment. These include structural, frictional and cyclical theories. The hypotheses were theorized by leading economists such Adam Smith, John Keynes among others. These form the basis of the neoclassical economic theories which have helped in explaining the fundamentals and intricacies of employment. According to John Keynes, unemployment is a product of deficient demand in which the economy fails in aggregate, to match with the labour force available. He argues that in the instance that a good or service experiences declining demand, the consequential impact will the reduction in production levels of the good or provision of the service. The dwindling production or provision of goods or services respectively, adjusts accordingly through a corresponding decrease in the number of employees needed. As a result, the persistent decline in demand fuels mass unemployment. In this theory of cyclical unemployment, Keynes hypothesizes that the unemployment situation leads to a disequilibrium in which the available job opportunities are far less than the labour force at hand. With this approach, the imbalanced demand supply scenario, cases of long term unemployment crop up. However, this school of thought believes that the intervention by the state can manage and put the situation under control through use fiscal and monetary policies. Apparently, the frictional theory of unemployment shares with Keynesian model. According to the theory, the variables which contribute to cyclical unemployment are ostensibly responsible in causing frictional unemployment. In the instance that disposable income decreases or even in general money supply which was unexpected, the shock waves lead to reduction in aggregate demand as the waves cause rational thinkers to behave accordingly. However, the classical theory believes that the free market is able to correct unemployment over time. According to this theory, the combination of low wages with the working of laisse faire invisible hand, the excess labour supply is utilized thus eliminating unemployment. Nevertheless, the setting of minimum wage rate may result to destabilization of the labour market. The controls consequently lead to unemployment. According to the school of thought exercised by classical economists, the economy may fail to provide the required number of jobs to match with the available labour force. The shortfall in the optimality of jobs to cater for the demand is believed to result from controlling of businesses by the state that acts as a disincentive in their growth. The owners find it as interfering with the operations. This in turn leads to reduction the demand of the labour force. Moreover, regulations such as mandated benefits, presence of labour union movements among other controls in the labour market, only serve to increase labour costs. In order to survive, the business owners adopt cost saving technologies which result to reduced labour demand. In consequence, the increasing workforce remains unabsorbed as the job growth is cut by the labour saving know-how approaches. In conclusion, the consequences of long term unemployment have both social effects and economic hardships. With failure by governments to take action to reverse the social and economic ills, the gains made may be eroded leading to social anarchy and disorders. Therefore it is the reasonability of the government to set up labour policies which will help in keeping unemployment rates at the minimum levels as well as social welfare programs. The enactment of such will help in alleviating the sufferings in addition to creating social order and harmony (Blank, 1994). Works Cited Blank,Rebecca . “Social protection versus economic flexibility: is there a trade-off?”Chicago: University of Chicago Press, 1994 Gallie, Duncan., Marsh, Catherine and Volger Carolyne . “Social change and the experience of unemployment” Oxford: Oxford University Press, 1994 Jackson, S & Crooks, M Existing but not living: a research project canvassing the aspirations and views of long-term unemployed Australians, Brotherhood of St Laurence, Melbourne, 1993. Machin , Stephen and Manning, Stephen “The Causes and Consequences of Long-Term Unemployment in Europe” Business Council of Australia July 1998 Turner ,John. A. “Individual accounts for social security reform: international perspectives on the U.S. debate”. Upjohn Institute, 2006. Wagner, Helmut. “Globalization and unemployment”. New York: Springer, 2000 Read More