Unemployment is defined as those who are qualified and actively looking for work but are unable to find one. People in the workforce who are working but not in the right job are included in this category. Unemployment is one of the indicators of a country’s economic state and is usually assessed by the unemployment rate, which is calculated by dividing the number of jobless persons by the total number of people in labor.
Unemployment is caused by a lot of different factors on both the demand (or employer) and supply (or worker) sides.
Rising interest rates, worldwide recession, and economic collapse may all contribute to demand-side cutbacks. Frictional unemployment and structural employment play an impact on the supply side.
Unemployment has an influence on both employees and the national economy, and it can have a cascading effect. Unemployment generates financial difficulty for employees, which has an impact on their families, relationships, and communities. When this happens, consumer spending, which is one of an economy’s most important drivers of growth, falls, potentially leading to a recession or even depression if not handled. Unemployment reduces demand, consumption, and purchasing power, resulting in decreased profitability for enterprises and budget cuts and personnel reductions.