For the purpose of this discussion we will explain the economic impact of unemployment rates. One of the main impacts of unemployment on the economy is that it inhibits people's ability to pay for necessities and luxury items and in doing so consumer confidence is diminished ("Unemployment"). In addition when people are unable to purchase their basic necessities they begin to utilize welfare programs which can be associated with a whole host of economic and social issues when people are unemployed for a significant amount of time and become dependent on the system ("Unemployment").

As such low unemployment rates are encouraged because they have the opposite effect on the economy.

However, there are some unwanted effects of high unemployment rates, including inflation. According to the article there are also those that argue that unemployment can increase productivity and profitability because it causes people to fear that they will loose their...
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