Title: The Cost of Unemployment to the Economy
Headings: The Cost of Unemployment to the Economy
The Cost of Unemployment to the Economy
It’s not just the price of paying out benefits
Key Takeaways
Costs to the Individual
Costs to Society
Costs to the Country
The Bottom Line

Content: The Cost of Unemployment to the Economy
Economy Economics
The Cost of Unemployment to the Economy
It’s not just the price of paying out benefits
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Stephen Simpson, CFA, has 15+ years of experience in financial publishing and editing. He is the operator of the Kratisto Investing blog. Learn about our editorial policies
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Toby Walters is a financial writer, investor, and lifelong learner. He has a passion for analyzing economic and financial data and sharing it with others. Article Reviewed on August 23, 2020
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Toby Walters
Updated Sep 24, 2020
Unemployment is universally recognized as undesirable. That is more evident than ever thanks to the Covid-19 pandemic, which left 10 million Americans jobless in its first two weeks. 1 ﻿ The situation is so serious that the Coronavirus Aid, Relief, and Economic Security (CARES) Act has expanded unemployment benefits to self-employed and part-time workers through Pandemic Emergency Unemployment Assistance, which provides up to 39 weeks of benefits beginning on or after Jan. 27, 2020, and ending on or before Dec. 31, 2020. 2 ﻿
While economists and academics make convincing arguments that there is a certain natural level of unemployment that cannot be erased, elevated unemployment imposes significant costs on the individual, the society, and the country. 3 ﻿ Worse yet, most of the costs are of the dead loss variety, where there are no offsetting gains to the costs that everyone must bear. Depending on how it’s measured, the unemployment rate is open to interpretation.