Future Employment Woes
The longer someone is unemployed, the more difficult he’ll likely have getting out of the unemployment rut. Chronic unemployment can be self-perpetuating, because the longer you are unemployed, the less attractive you might be to potential employers. Katherine Newman, a dean at Johns Hopkins University, tells Marketplace.org that “You look like damaged goods” when you go too long without being able to get your foot in the door with a career.
Less Overall Spending
When people are unemployed in large numbers, it hurts the rest of the economy, creating a cyclical problem. When people have less money to spend because of unemployment, other companies suffer from less consumer demand. Then, when companies suffer because of lost business, they might in turn be forced to make layoffs of their own, making the unemployment rate rise and overall spending drop even more. The cyclical effect of unemployment is the reason for government-issued economic stimulus packages. Logic suggests that when people have more money, they spend it, thereby stimulating the economy and simulating job growth.
You can’t always see the effects of unemployment — it can have an overall effect on a person’s mental health. While unemployment does not have much of an initial affect on someone’s mental well-being, after a few months, it takes its toll. People experiencing chronic unemployment might become anxious or depressed, and have trouble sleeping. Prolonged unemployment also has a negative overall effect on a person’s sense of self-worth, damage that might remain in place even after the person is once again employed, according to a webpage on Washington and Lee University’s website.
Community Ripple Effects
Even if you are not unemployed, the unemployment of people in your community can hit home. When people are unemployed, they likely will have difficulty paying their mortgage, which could result in foreclosure. Foreclosed homes, neglected properties and vacant houses often lower the property value of homes that remain occupied.