Unemployment is a significant social and economic problem. Not always positive aspects of enterprise development contribute to a decrease in the percentage of unemployed. The negative impact may be cumulative along with phenomena such as inflation external factors, including the pandemic. Difficulties in obtaining an education for low-income families only widen the gap between the rich and the poor, which in America is already the largest in the world (Telford, 2019). Consequently, the leading causes of unemployment are inflation, advanced technology, and lack of education or skills for employment.
Inflation drives up prices in the economy. Naturally, the price of both products and the materials they have produced increases. Employers seek to recoup the costs of inflation by constantly increasing the financial performance of sales. One of these methods is to increase the gross profit ratio by reducing the cost of production. As a result, the company seeks to optimize costs by reducing wages and saving on various employee benefits. This unfair practice leads to layoffs.
One of the vectors of technology development, which is now the most crucial unemployment, is automation. The replacement of human labor brings the company to eliminate the human error factor, the ability to operate robots around the clock, reducing jobs. From an economic point of view, many of yesterday’s professionals consider their position obsolete and remain without skilled work. A possible way out of this situation is to retrain as a consultant to maintain such machines.
The lack of skills can be caused by several reasons, from income inequality that limits access to education to the narrow specialization of a company that requires training. On-the-job training requires, in turn, the cost of human and time resources, which can affect the company’s operations. As a result, many companies do not train employees but want to get a qualified specialist with a high salary immediately. Applicants lacking these skills are forced to remain unqualified, contributing to rising unemployment and shortages.