Labour Economics
ECS2604
Second Semester 2024
ASSESSEMENT 03
Question 1
Discuss why South Africa should regard increases in the unemployment rate
as its biggest social problem.
The social costs of high unemployment refer to the negative impacts that
unemployment can have on individuals, families, and communities.
South Africa should regard increases in the unemployment rate as its biggest social
problem due to several reasons.
Financial strain: Unemployment can lead to a reduction in income and an
increase in financial insecurity, as individuals may not have the resources to
meet their basic needs or pay for necessities such as housing, food, and
healthcare.
Mental health problems: Unemployment can have a negative impact on
mental health, as individuals may experience stress, anxiety, and depression
due to their financial situation and loss of purpose and social connections.
Relationship problems: Unemployment can also strain relationships, as
individuals may feel isolated, anxious, or depressed, and may be unable to
contribute to the household or support their families.
Social disruption: High levels of unemployment can lead to social disruption
and unrest, as individuals may feel disenfranchised or disconnected from their
communities.
A rise in inequality: High unemployment can contribute to income inequality
by reducing the income and opportunities available to certain groups, and by
exacerbating existing disparities in the job market. For instance, racial and
ECS2604
Second Semester 2024
ASSESSEMENT 03
Question 1
Discuss why South Africa should regard increases in the unemployment rate
as its biggest social problem.
The social costs of high unemployment refer to the negative impacts that
unemployment can have on individuals, families, and communities.
South Africa should regard increases in the unemployment rate as its biggest social
problem due to several reasons.
Financial strain: Unemployment can lead to a reduction in income and an
increase in financial insecurity, as individuals may not have the resources to
meet their basic needs or pay for necessities such as housing, food, and
healthcare.
Mental health problems: Unemployment can have a negative impact on
mental health, as individuals may experience stress, anxiety, and depression
due to their financial situation and loss of purpose and social connections.
Relationship problems: Unemployment can also strain relationships, as
individuals may feel isolated, anxious, or depressed, and may be unable to
contribute to the household or support their families.
Social disruption: High levels of unemployment can lead to social disruption
and unrest, as individuals may feel disenfranchised or disconnected from their
communities.
A rise in inequality: High unemployment can contribute to income inequality
by reducing the income and opportunities available to certain groups, and by
exacerbating existing disparities in the job market. For instance, racial and
