Understanding risk

Risk: Unemployment outlook 

The International Labour Organization (ILO) estimates the number of individuals in the labour force aged 15 and up in 2017. Unemployment can be used to assess the overall health of the economy. Long-term high unemployment reduces consumer purchasing power, lowers government tax revenues, and raises the risk of societal instability. Furthermore, while economists and scholars think that some natural unemployment is unavoidable, excessive unemployment has huge consequences for individuals, society, and the country. Worse, the majority of the expenditures are "dead loss" in nature, which means that there are no benefits to offset the costs that everyone must bear. Depending on how the unemployment rate is calculated, it can be interpreted in a variety of ways.




And, with that in mind, business prospects in a country with a high-risk unemployment outlook can put a company's survival in jeopardy. South Africa, Greece, Spain, Tunisia, the Dominican Republic, and a number of other countries have high-risk unemployment rates, making it vital for businesses to operate in these countries. Countries like Qatar, Bahrain, Thailand, and Singapore, on the other hand, have a low risk of unemployment, making it safe for businesses to operate there.





Furthermore, it's important to keep in mind that rising unemployment costs firms money. Unemployment benefits are mostly paid by employer taxes. 14 When unemployment is high, states usually strive to boost revenue by boosting corporation taxes, which, however, prevents businesses from hiring more workers. Companies are finding it more expensive to keep or hire staff, not only because of decreasing demand for their products. Aside from causing social unrest and discontent among the general people, high unemployment can have a self-perpetuating negative impact on businesses and the country's economic health.

Lastly, Some of the major consequences of unemployment can be listed below:

  • Unemployment has societal consequences that aren't just financial.
  • Unemployed people lose not just money, but also their physical and emotional health.
  • Heavy unemployment has two societal costs: increased criminality and a decreased rate of volunteerism.
  • Government spending extends beyond the provision of benefits to the loss of worker productivity, decreasing GDP (GDP).

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