The effect of unemployment on living standards and the economy

When someone loses a job, a family is affected. When many people lose their jobs,
eventually the whole nation is affected. Workers lose income, while the country
loses production and consumer spending.

Unemployment is globally considered unwelcome and that is more obvious than

usual due to Covid-19, which in the first two weeks of its outbreak left 10 million
Americans without jobs

Costs affecting the individual and their family:

 The person’s living standards are immediately affected due to the loss of
income, and even for those people who may be eligible for unemployment
benefits and government assistance, these often only replace 50 % or even
less of their original income.
 Most people then consume less and reduce their consumption of luxury
products , with people badly hit limiting their spending to only the bare
necessities of life.
 If a person is unemployed for a long period of time, this will result in the
erosion of skills, which in turn deprives the economy of otherwise handy
skills. Similarly, the absence of income can leave families with no choice
but to deny educational opportunities to their young ones which reduces the
abundance of those useful skills in the economy

At the same time the experience of unemployment (either direct or indirect) can
change how workers plan for their futures—prolonged unemployment can lead to
greater negative perceptions and pessimism about the value of education and
training and result in workers being less willing to invest in the long years of
training some jobs require.
  There exist even social consequences of unemployment. Studies have shown
that times of elevated unemployment often correlate both with less
volunteerism and higher crime.

Elevated crime is quite an obvious outcome, because without a wage-paying job,

people may turn to crime to meet their economic needs. The volunteerism decline
does not have a clear-cut explanation, but could perhaps be linked to the negative
psychological impacts of being jobless or perhaps even resentment toward those who
do not have a job.
 
Effects on the economy and government:

 Unemployment means that higher payments from state and federal

governments for unemployment benefits, food assistance, and medical aid
need to be made. In January 2020 payments from state and federal
governments for unemployment benefits totaled $2.95 billion.
 Another aftermath is that state and federal governments are no longer
collecting the same levels of income tax as before—obliging these
governments to borrow money, which is not recommended for any country.
 Lower GDP for the economy. High unemployment indicates the economy is
operating below its full capacity and is inefficient; this will result in lower
output in general. The unemployed are also unable to purchase goods the ways
they could before, so will contribute to lower spending and lower output.