explain why the concentration of unemployment is a problem?

[MacKenzie J]

Explain how unemployment affects certain groups more than others. Be sure to include a discussion of the concentration of the human costs of unemployment, the frequency of unemployment, and the duration of unemployment.

[drypress]

1. With large populations, unemployment has huge costs to the government, in the form of fiscal responsibilities to pay for what is known as social welfare, the concept from which the commonly known Welfare program came from. These costs increase almost exponentially if unemployed persons have children who are not upwardly mobile in the economic system.

2. Unemployment decreases quality of life by preventing education and exposing young people to potentially dangerous situations such as crime and drug trafficking. The incentives for these activities are often derived from a financial motive, and worsened by poor education. Tax burdens from social welfare also burden the middle class, which becomes stressed and therefore less capable of work.

3 and 4. What is called the 'transition period' or 'period of latency' for those who are employable in the workforce but remain unemployed (and this may not actually be a large percentage of the unemployed) determines the probability of being re-employed, and therefore the general determination of employability in general. When a low percentage of low-income individuals is re-employed during a certain period, there may be an even greater number (over time) who are no longer employable at all.

5. Furthermore, there may be effects upon industries, according to an argument that sheer non-employability decreases the potential of the education system, reducing advances in medical and technological fields. However, if there is untapped potential such as intellectual capital that could be created or might exist as a function of government funding, it behooves government to create this capital, as it may be a cheap source of market viability, or at least Smithian competition.