All throughout the years the economy has been changing, with the unemployment rate fluctuating to accommodate the economic changes. With unemployment on the rise people have to choose between their wants and needs based on their economic situation; the ability to prioritize these things will make or break them in this economy. The government plays a direct and indirect role in the economic lives of people as well. There are possibly things that can be done about the current economic situation but the problem has yet to be solved. Just as stated, the effect of the economy on Phenix City and Alabama has the employment of workers fluctuating.
In a broken economy, where job losses and credit ...view middle of the document...
As a protector, the U.S. government enforces laws such as those against false and misleading advertisements, and unsafe cars. It enforces laws against individual freedoms. In short, the government protects property rights, enforces contracts, and tries to make sure the rules are followed to ensure an efficient and fair economy. All levels of government provide goods and services for the citizens. The national government supplies defense services, state government provide education and public welfare, and local governments provide parks, libraries, and bus services. In the role of the regulator, the national government is charged with preserving competition in the marketplace; also oversees interstate commerce, communications, and entire industries. State governments regulate insurance rates and car registration; while local governments regulate business activity with building and parking permits. So in all, government functions reflect people’s desire to modify the economic system to achieve the economic goal of freedom, efficiency, equity, full employment, price stability, and economic growth.
Unemployment results in a lower living standard as people do not have an income to provide and maintain their standard of living; which could also lead to anxiety for the future and low self esteem. Studies have shown that prolonged unemployment harms the mental health of workers, and can actually worsen physical health and shorten lifespan. Crime increases and violence as people try all ways to settle financial problems and earn a living in some way.
A nation, state, or city can only enjoy high standard of living if it can produce large amounts of goods and services. The production of these goods and services depends on physical capital per worker and human capital per worker which is affected by unemployment.
The more unemployment rate increases the more consumption rate of goods and services decrease. Those without jobs are unable to earn a steady income creating an incentive to save more money, and so demand for goods and services decreases. Without the demand on these goods and services, supply decreases as there is no need for production. Similarly, as productivity goes down with unemployment, companies lose money as they cannot properly serve their customers.
Rising costs force businesses to cut back on labor, which make businesses want to avoid having to pay more employees, and offer employees the incentive to take early retirement or lay them off altogether. Unemployment rates increases when there are more workers available than there are positions. When there are more positions waiting to be filled than available workers with the proper skills, the unemployment rate will be higher than when there was a surplus of available openings. Some workers may not possess the necessary skills needed for a particular job position. Due to the lack of experience, young people have more difficulty finding jobs and unemployment rates tend to be...