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Unemployment as a Social Issue


Subject Sociology Pages 4 Style APA



Unemployment is a critical issue in contemporary society because of the social and economic problems that it has introduced in society. It refers to individuals who are employable and actively seeking a job but are unable to find a job or those in the workforce who are working but do not have an appropriate job (Caggiano, Castelnuovo, and Figueres 31). Despite the existing mechanisms designed to control the problem, it has continued to affect the operations of different sectors and individuals’ standards of living. The problem of unemployment gives rise to poverty, increases crime rates, and promotes substance abuse because people seek avenues to deal with employment stress (Caggiano, Castelnuovo, and Figueres 31). This implies that unemployment is a critical problem in the modern economy because of the issues that it raises in various contexts which can be solved through command-based solutions and incentive-based solutions such as

Reasons why Unemployment is an Important Social Issue

Unemployment is a significant social issue on account of the issues it presents to society. The primary significant motivation behind why joblessness is an essential social issue is a result of the psychological and actual medical problems related with it. As per research, joblessness causes changes in cholesterol levels bringing about sickness manifestations that show medical affliction (Khuhawar and Shah 8). At the point when individuals lose positions, they don’t just lose their livelihoods, yet in addition the day by day schedule that they were familiar with and a feeling of direction that they once had bringing about upsetting sentiments and feelings, for example, those accomplished when one is grieving the passing of a friend or family member. The serious feelings of anxiety related with long haul joblessness have undermined people’s wellbeing results, expanding their weakness to mental issues (Kaufman et al. 222). Furthermore, under-used or unused work influences society all in all since it diminishes advancement openings because of expanded neediness levels and dependence on government uphold and the utilized. It suggests that joblessness is a basic issue in light of the psychological and actual medical problems that it opens people to in a general public.

Furthermore, long haul joblessness is hurtful to kids. Examination sets up that youngsters from families that have for quite a while, not had the option to make a decent living experience the ill effects of low good and actual turn of events (Khuhawar and Shah 9). Joblessness is the main driver of monetary issues which makes it hard for guardians to satisfy the longings and needs of their youngsters. Ceaseless cash lack likewise influences kids’ wellbeing as they don’t get legitimate nourishment and debilitates family holding constraining youngsters to develop with a feeling of feeling of inadequacy. Quality training is vital for legitimate advancement of a kid. Be that as it may, the issue of joblessness makes it outlandish for some youngsters to get to it obliterating the chance of a splendid future.

Command-based Solutions to Unemployment

Several solutions have been developed to address unemployment, but lowering the minimum wage and reducing trade unions’ power have proved effective. Lowering the minimum wage is an appropriate command-based solution because it limits employees’ ability to demand higher wages. Economists argue that a 1% increase in wages leads to a 0.3% to 1% decrease in the employment rate depending on whether wages increase citywide or in only one industry (Kaufman et al. 220). These figures demonstrate that higher minimum wages lower employers’ ability to hire and retain a significant workforce. By increasing the cost of employing low-wage workers, a higher minimum wage generally leads employers to reduce their workforce size (Kaufman et al. 220). Therefore, reducing such costs provides ideal opportunities for addressing unemployment because it motivates employers to hire a larger workforce. This implies that governments should reduce the minimum wage standards if they seek to increase employment rates and address the challenges that unemployment presents to the economy. The minimum wage rate has significant effects on employment rates because it can increase or lower employment based on employees’ skills level.

                Reducing the power of trade unions also addresses unemployment because it limits their collective bargaining. Trades unions can push wages above the equilibrium wage rate, increasing unemployment rates due to a rise in real wages (Agénor and Lim 24). Therefore, reducing the power of labor unions limits their ability to negotiate higher wages or increase the benefits of the employed at the unemployed expense. This implies that advocating for non-unionization or lowering the existing unions’ authority improves employment rates within a country. For instance, it increases employers’ ability to employ and maintain a large workforce because they have appropriate infrastructures and resources to sustain them. Similarly, it relieves them of the intensive pressure from various trade unions, which gives them the power to dictate the wage rates and the benefits provided to the employees. This implies that reducing labor unions’ power contributes to high employment rates in different sectors of the economy.

Incentive-based Solutions to Unemployment

Incentive-based solutions such as benefits and tax reforms provide ideal frameworks for dealing with unemployment. Targeted measures to improve people’s incentives might include linking welfare benefits to participation in work experience programs or lower marginal tax rates for people on low incomes (Beblavý and Lenaerts 35). Developing measures designed to lower the real value of benefits, including unemployment benefits, compels people to search for jobs to sustain themselves. Reducing payroll taxes and increasing the progressive wage tax keeps the unemployment margin at its lowest (Heijdra, Ben, and Ligthart 97). If the government continues to provide unemployment benefits to the unemployed population, their commitment to finding jobs might decline because they receive government resources or support. Similarly, tax incentives such as lower marginal tax rates for people in the low-income group lowers unemployment rates because it motivates people to find jobs. This implies that lower taxes and unemployment benefits create ideal conditions that motivate people to find jobs.

                The other incentive-based solution is employment subsidies provided to different employers. According to research, employment subsidies are generally more effective in reducing unemployment than other measures (Brown 2). For instance, as part of the UK youth contract, payments of up to £2,275 are available to employers who take on young people (aged 18-24) who have been claiming Job Safety Analysis for more than six months (Beblavý and Lenaerts 37). This approach has encouraged the youths to find jobs and increase the workforce of firms providing long-term employment opportunities. Subsides including employment tax cuts have also reduced unemployment rates in different economies reduced taxes on businesses with a larger workforce increases employment (Beblavý and Lenaerts 37). Besides, arming students with flexible skills to enable them create jobs for themselves solves the issue of unemployment. Research shows that the neoliberal education allows students to directly serve capitalism and create jobs (Peters et al. 244). These incentives compel firms to develop long-term employment initiatives to reduce unemployment rates while enjoying the available government support. Thus, incentive-based solutions prove more effective than command-based solutions because they do not dictate what employers should embrace. However, they have increased government expenditure especially on neoliberal education, which has lowered the ability to pursue development projects designed to provide permanent or long-term employment opportunities.





Agénor, Pierre-Richard, and King Yoong Lim. “Unemployment, growth and welfare effects of labor market reforms.” Journal of Macroeconomics, vol. 58, 2018, pp. 19-38.

Beblavý, Miroslav, and Karolien Lenaerts. “Feasibility and added value of a European Unemployment benefits scheme.” Centre for European Policy Studies, Brussels, 2017, pp. 1-113.

Brown, Alessio. “Can hiring subsidies benefit the unemployed?” IZA World of Labor, vol 163, no. 1, 2015, pp. 1-9.

Caggiano, Giovanni, Efrem Castelnuovo, and Juan Manuel Figueres. “Economic policy uncertainty and unemployment in the United States: A nonlinear approach.” Economics Letters 151 2017, pp. 31-34.

Heijdra, Ben, and Ligthart, Jenny. “Labor tax reform, unemployment, and search”, International Tax and Public Finance, vol. 16, no. 1, 2009, pp. 82-104.

Kaufman, John A., et al. “Effects of increased minimum wages by unemployment rate on suicide in the USA.” Journal of Epidemiol Community Health, vol. 74, no. 3, 2020, pp.  219-224.

Khuhawar, Khizer, and Shah, Haya. “Social Problems due to Unemployment, Journal of Marketing and Information Systems, vol. 1, no. 2, February 2019, pp. 8–9.

Peters, Michael A., et al. “The Curious Promise of Educationalising Technological Unemployment: What Can Places of Learning Really Do about the Future of Work?” Educational Philosophy & Theory, vol. 51, no. 3, Mar. 2019, pp. 242–254.

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