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: 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. Key Takeaways
Unemployment has costs to a society that are more than just financial. Unemployed individuals not only lose income but also face challenges to their physical and mental health. Societal costs of high unemployment include higher crime and a reduced rate of volunteerism. Governmental costs go beyond the payment of benefits to the loss of the production of workers, which reduces the gross domestic product (GDP). Costs to the Individual
The costs of unemployment to the individual are not hard to imagine.