Why Is Unemployment Important?
Unemployment is important because it serves primarily as a measurement of economic health on a local, state and national scale. Unemployment is studied and quantified as a measurement of economic health to demonstrate what sectors are most affected by unemployment as well as correlations between lower rates of employment and people of certain ages, ethnicity and socioeconomic status.
Rates of unemployment vary on a virtually constant basis. Sometimes, unemployment is low for a short period of time and is limited to one or a few industries. Other times, however, unemployment rates are chronically high and are found in many industries. This is often caused by a larger systemic problem, such as an economic recession or depression. Unemployment rates are only one measurement of economic health. Other factors used to determine the growth or contraction of the economy include gross domestic product output, inflation, interest rates, stock market and exchange rates. These factors are generally evaluated by a variety of individuals including bankers, business owners, policymakers and financial analysts to troubleshoot economic problems and identify possible remedies. Low rates of unemployment signal good overall economic health. Low unemployment means that the majority of people are working and receiving incomes, which allows them to consume goods and services, which is essential to continued economic growth.