Economic Impact Of Unemployment In Malaysia

INTRODUCTION

Unemployment normally we can said that number of person who are actively searching work and also willing to work but unfortunately cannot find a job. The most often measure of unemployment is the unemployment rate. “ Unemployment reduces the long run growth potential of the economy. When the situation arises where there are more other resources of the production and no man power leads to wastage of economic resources and lost output of goods and services and this has a great impact on government expenditure directly” by Clark,2003 .

While official unemployment rates are regularly accumulated and broadly published, we should be always aware, particularly when they are being used for international and intertemporal comparisons, of

High unemployment means that labor resources are not being used efficiently. One of the affect of unemployment on political in Malaysia is loss of trust in administration and the government which may lead to political instability. Unemployment also lowers the economic growth (GDP) of our country. This will cause the nation have lower purchasing power and may lead to worst quality of life. Impact on government taxation and spending and negatively affect country finances. Due to taxation on labor income deforms work-leisure decisions and it increases unemployment rates. When our country is on increasing unemployment rates it causes deteriorating economy. Due to deteriorating economy , the numbers of investors to invest in Malaysia decreases drastically. When there is no investment, there is no new jobs, therefore labor demand will decrease accordingly. This causes a great impact on the crime rate in Malaysia. Crime rates increases drastically when there is no job. People tend to get involved in crimes such as robbery, murder and even drugs to earn money. When crime rate increases , it leads to economic instability. This will affect the tourism industry because tourist will not visit Malaysia due to high crime rate as it could be a threat to them. When there is political and economy instability, the debt of our country increases. This may cause Malaysia being in a bad shape

Firstly, stress can be the main impact for unemployment. Stess can be a state of mental or emotional strain or tention resulting from adverse or very demanding circumstances. Nowdays, a lot of unemployment fresh graduates suffering from this deseases. When a person’s work ends by force due to financial plan cuts it is usual to feel a sense of cost and the need to take some time to begin to settle. At least momentarily, you may have misplaced many things important to you with your daily financial safety and position, etc. Even though the job loss is due to budget cuts and is not your fault, it is mutual to feel some loss of self respect, and think that somehow you have failed. It can be tough to tell your friends and family. So this will lead unemployees to become more