Unemployment rates are an important economic indicator that affects families and communities in a variety of ways. Unemployment has a direct impact on family stability, which can influence a person’s career trajectories and personal well-being (Burgard, Brand, & House, 2007). It also negatively impacts children’s economic opportunities, mental health, and overall quality of life (Benson, Jacobson, & LaLonde, 2004). Families with one or more unemployed parents face particular difficulties. They are more likely to live in poverty than those whose parents are employed. They are also more likely to experience instability in housing, which can have long-term consequences for their educational achievement and emotional stability (Morris et al., 2022). Moreover, the economic stress associated with unemployment can affect the relationship between husbands and wives, leading to divorce.
There are a number of different measures used to describe unemployment, but the Bureau of Labor Statistics commonly quotes U-3, which includes people who have been out of work for 15 weeks or more. More comprehensive measures include U-5, which includes discouraged workers, and U-6, which also adds marginally attached and part-time workers who want full-time jobs but can’t get them.
The most fundamental factor in unemployment is cyclical: During periods of economic slowdown or recession, businesses face declining profits and shrinking markets, which can lead to cutbacks like layoffs or hiring freezes. Conversely, when the economy is growing and companies need more hands to meet consumer demand, the unemployment rate goes down.