 Effect of unemployment

The rates of unemployment around the world is made worse with the covid-19 pandemic.
Since the virus was first discovered in Wuhan City, Hubei Province, China it has quickly
spread around the world. Many industries were forced to shut down or at least to reduce their
operations leading to massive lay-off especially in the aviation and tourism industry. Global
economic growth for 2020 is expected to decline 3.0 per cent while advanced economy at
-6.1 per cent. Malaysia’s economy for the year 2020 is forecasted to decline 1.7 per cent. The
immediate effect of unemployment is the loss of livelihood and individual capacity to support
oneself. This subsequently leads to several other effects’ which is social problem, mental
health, strain to the government. The first social problem, a lot of company has to close their
business due to this pandemic covid-19 that hit our country recently. Due to this unexpected
event a lot of employee lost their job. Social costs of unemployment include severe financial
hardship and poverty, debt, people are unable to pay their monthly commitment when they
lost their source of income. High unemployment rate among the Malaysian graduates has
been a growing concern among the public. Other than that, increasing of the competition for
graduate can lead to mental health. Every year Malaysian universities, public or private
higher institutions produced a large number of graduates but the percentages of the graduates
acquire a job at the end of the day is surprisingly low. According to Law (2018), there are
about six out of ten of those unemployed are below age 24. Every year, there are more than
250,000 students graduated, but one in five fresh graduates remain unemployed 6 months
after graduation. Among of these fresh graduates with tertiary education, about 26% first
degree holders are unemployed. Most unemployed fresh graduates are from Public
Universities which is about 50% and 47% from Private Universities. Graduate who unable to
get a job offer will This is due to the stress and pressures as well as affected their self-esteem
which arise the feeling of helplessness which leads to short lifespan (Azhar, n.d.). Next strain
to the government would be an effect of unemployment. This is because when people are
jobless, they cannot make any contribution to their own nation. The government need to
provide a job opportunity to the citizen so that they can play they own part in economic
circulation. For example, during pandemic covid-19 Malaysia government has provide many
forms of aid to ease the citizen hardship. Malaysia government has provided Moratorium on
loans / financing repayments by financial institutions is available for 6 months from 1 April
2020 which has been extended for 3 months from 1 Oct 2020 for targeted group. They also
provided a special grant of RM3,000 given to each qualifying micro SME and the micro SME
that had register with the Malaysian Inland Revenue Board.