UNSW Foundation Year '08- Long essay

8/14/2019 UNSW Foundation Year '08- Long essay

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What are the impacts of unemployment on society? Focus on one or

more countries.

Unemployment which has been occurring across many nations has been

regarded as one of the prevailing phenomena that raise several controversial

concerns to a wide range of experts and politicians. Many have defined the

term unemployment in relatively different ways, however, based on the

purpose of this essay, unemployment could be referred to the number and

proportion of those aged 15 and beyond who have not worked for the

previous periods, are actively searching for and capable to work relative to

the total labour force (Australian Bureau of Statistics, 2001, Internet).

Moreover, according to Bauchspies, Croissant and Festivo, society could bedescribed as an interacting group of individuals who live in the same

geographical region, could have a mutually economic dependency and

pursue an integrated cultural background (2006, 6). In order to examine the

impacts of unemployment on society, Australia and Sweden will be taken as

objects of observation through a certain number of aspects, including burden

on public pension schemes, a tendency of increasingly associated social

problems and possible consequence of poverty.

Firstly, it appears that unemployment benefits spending could account for a

considerable proportion of government budget and could adversely affect the

benefits of other groups in society. As Australian Government Department of

Families, Housing, Communities Services and Indigenous Affairs reports,

unemployment expenditure has constituted approximately 1.13% of GDP in

1997 to become the most significant increase in government security

payments in that year (2008, Internet). Although this could allow the

unemployed to obtain greater benefits from welfare payments, some possibly

detrimental consequences may arise. The Nuffield Foundation emphasises

that the occurrence of unemployment is in inverse relationship with tax

revenues collected by government (2005, Internet). Since taxes are usually

imposed on financial income of those in the workforce, the higher rate of

unemployment, the greater loss of income, and thus more tax budget could

be sustainably declined. Simultaneously, not only does government bear the


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only disadvantages from unemployment but other sectors in society may also

be susceptible to incur them. For example, OECD (Organisation for Economic

Co-operation and Development) Economic Surveys Sweden criticises federal

expenditure for child care and early retirement support were aggressivelycontracted with the purpose of decreasing budget deficit during the period of

unemployment in Sweden in 1994 (cited in Mares, 2006, 117). To exacerbate

this situation, Mares predicts there is a possibility that government would, in

fact, raise taxation levels in order to compensate the fall in tax revenues

which could affect enterprises and households income and may eventually

lead to higher unemployment (2006, 18). In addition, social assistance and

unemployment insurance could also result in the negative impact that

instead of enhancing the incentive of searching for work, these support

payments seem to cause the unemployed to extend their unemployment

durations to gain more benefits (Munts and Garfinkel, 1974, 9). This is

continued to be supported by Chetty as shown that unemployment durations

could rise by 6-8% if there is a 10% increase in welfare payment (2005,

Internet). Therefore, this acts as another contributor to the pressure on

government to balance its expenditure in accordance to the needs of

different social groups. Thus, it could be said that unemployment could have

the adverse influence on government budget and impose externalities on

other groups in society.

Moreover, the influx of unemployment is also more likely to correlate with the

upward trend in the level of crime committed, in which the patterns of violent

and property crimes are said to be both approaching the higher rates. Banks

and Ullah cite Feathers suggest that there could reveal a trend of rising inpsychological responses of those unemployed due to the frustration involved

in the successive failure of job seeking procedure (1988, 122). Although there

is evidence which illustrates these psychological distresses could shape in a

form of non violent behaviour such as passive acceptance of the current

circumstances, the frustration aggression theory also implies that they

could possibly expose the unemployed to anti-social activities (Stromback,

1983, 6). Consequently, violent crime such as assault and homicide is amongthe possible outcomes that could appear. Furthermore, Winefield,


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Tiggemann, Winefield and Goldney also allege that unemployment could

relate to the following increase in drugs consumption (1993, 132).

Subsequently, Winefield et al. continue to display concerns that drugs could

act as the stimulants that usually induce the addicts to crime. Not only doesthe domestic violence increase but there is also a possibility that property

crime could also rise as a result of unemployment. Study carried out in

Australia suggests that the reduction in the number of young adult

unemployed would lead to a decline in property crime in New South Wales by

nearly 7% (Chapman, Kapuscinski, Roussel, Weatherburn and Chilvers, 2002,

Internet). Similarly, in Sweden, each marginal percentage increase in

unemployment rate is found to correlate with a subsequent increase in

burglaries and care thefts, with around 3.75% and 4%, respectively (Edmark,

2005, Internet). This could be considered as an inevitable consequence since

the unemployed no longer could support their living as a result of restricted

income. Additionally, Durkhein also notes that an abrupt change in economic

situations from employment to unemployment would also result in the

aggressive conducts in the unemployed due to the feelings of social

elimination (cited in Junankar, 1984, 11). Hence, these factors seem to have

a mutual connection that could cause the crime rates to rise in the

unemployment period.

Finally, it seems that unemployment could become the significant contributor

to poverty risk exaggerating if this issue does not receive adequate

consideration of authorities. As Saunders indicates, paid employment is major

source of income for most households in society (2002, 176). Thus, the

considerable loss of income derived from unemployment would be morelikely to lead to the contracted expenditure. Nevertheless, this is not always

the case as Dhooge and Popay cite Berthouds study that the circumstance is

more often to be impoverished due to the fact that the unemployed could not

even afford their basic necessities including fuel, rent and clothing (1987,

160). In support, King demonstrates that the unemployed in Australia

accounted for the highest poverty rate in 1996 due to the fact that nearly

70% of individuals whose income earned fell below the median incomestandard (cited in McClelland and Macdonald, 1998, Internet). Consequently,


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children are among the groups that are most likely to be exposed to

disadvantages as the financial situation of their families could not be

sufficient enough to support their needs. For instance, some children could

experience the feelings of social exclusion from the young age as theirparents could not afford the expenses for uniforms and books as other

fellows or worse than this is that the existence of limited opportunities in

career options (Taylor, 2002, 74). Therefore, it could be said that

unemployment seems to have a fairly strong link with the poverty issue.

In conclusion, it appears that unemployment could have several effects on

society, however, the there remains three main social impacts, which include

pressure on government security payments that could also affect othergroups in society negatively, the increased trend of employed offenders and

the linkage between unemployment and poverty that could arise some

problematic consequences. Among these, it seems that poverty is the most

important effect as it could be seen as the source of the other problems. In

other words, not only could poverty induce the unemployed to commit the

crime but it might also lay a greater pressure on government budget to

stabilise the nation and stimulate the economy.

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UNSW Foundation Year '08- Long essay