Read this article to learn about bad effects of unemployment on Economic Growth!

Unemployment is a big problem which effects the economic growth of the country. It has following bad effects:

(i) Exploitation of labour:

Due to unemployment labourers are exploited. They have to accept low wages and work under un-favourable conditions.


(ii) Industrial disputes:

Industrial disputes arise because of unemployment. It has adverse effects on employer-employee relations. Due to industrial disputes, the unemployment rises.

(iii) Political instability:

There is political instability in the country due to unemployment. Unemployed persons engage themselves in destructive activities. They consider Govts, worthless. Economic development becomes difficult under conditions of political instability.


(iv) Social problem:

Many social evils like dishonesty, gambling and immorality etc. arise due to unemployment. It endangers law and order situation of the country. It causes social disruption in the society.

(v) Increase in poverty:

Under the situation of unemployment a man has no source of income. Unemployment causes poverty. Burden of debt increases. Economic problems increase.


(vi) Loss of human resources:

Due to unemployment, human resources go waste. No constructive use of labour force is made. If human resources are properly used, economic growth of the country will increase.