Why Unemployment is Bad For The Economy

We are looking at a world that may have finally dispensed with the idea of labor, but in a capitalist economy this can be a very bad thing. A lot of companies are actually moving towards automation of labor in an attempt to save as much money as possible as well as maximize the efficiency with which everything is done. After all, a machine does not need to get paid, and its regular maintenance can be done by a far fewer number of people thus costing a lot less than the salaries of the people that it is replacing. Machines also don’t require food, sleep or bathrooms breaks, and there is also the fact that they tend to be far less prone to human error since they are not humans in the first place.

This can prove to be disastrous for the economy for a number of reasons. One of the biggest reasons is that these companies depend on people buying things from them. For people to be able to buy things they obviously need money, and if they want money they will need jobs. If all the labor gets automated, the people that were doing that labor will no longer have the money to afford the things that these companies produce. Hence, all of the money that these companies are saving will end up being worthless.

This is why it is very important for these companies to hire career transition specialists that would provide outplacement counselling to the people that they are laying off or firing. This will help train these people and make them fit for other jobs that would require a completely different set of skills, thus ensuring that they would remain gainfully employed and hence able to continue contributing to the economy in some way.