Unemployment

2 Pages 578 Words

With many of today’s companies looking for ways to save money and increase profits we are seeing an increase in the number of unemployed. Companies are looking to cut costs and employees are a major expense for a company. Not only does a company have to pay the wages of a worker, but the company must also match the Social Security and Medicare payments.

Another expense of employers is medical insurance; even if the companies have its employees contribute to the cost of their benefits, it still does not offset much of what the company still pays.
With the increasing costs to a company they are looking at moving jobs to countries where it’s able to pay workers a lower wage. An example of this would be an American company moving it manufacturing facilities to Mexico.

Another reason would be the use of labor saving automated equipment. Companies are using more computers and robotics instead of human labor. By automating more of their operations companies are increasing productivity and profits but at the same time they are contributing to the rise in unemployment.
The importing of goods into the country also contributes to the increase in unemployment. Goods are bought in a low-wage country for a cheap price and then brought into a high wage country and sold with large mark-ups. Selling prices of products produced in the higher wage country are marked down so they can compete with the imported products. But the imported products can be reduced even further which in the end knocks the home produced product out of the market. This then causes many companies to have to reduce their work force and sometimes even close their doors. Which reduces wages and increases unemployment.

The social implications of unemployment to a community vary from individual to individual. People living at or below the poverty level increases. A decreasing in that individuals spending has a snowball effect on the entire community. Ma...