Unemployment is disastrous on both the individual and societal level.
Individuals who look for work but can't find it are miserable.
On the national level, high unemployment is both cause and effect concerning other problems with the economy. As we'll see below, high unemployment results from a weak economy and - in turn - weakens the economy.
Until the causes of, and solutions to, high levels of unemployment are understood, we will not be able to solve the problem.
How High is Unemployment?
Before we can even start looking at causes or solutions, we have to understand what the current level of unemployment really is, and what the trends portend for the future.
Let's use America as an example. With the largest economy in the world, it has often been said that "when America sneezes, the rest of the world catches cold". And much of the rest of the world has adopted the "Washington Consensus" - America's neoliberal view of economics.[2
] Moreover, the rest of the world has been infected by many types of "toxic assets" invented in America, such as credit default swap derivatives[3
], as well as Wall Street style banking strategies. So I will use the United States has a case example, but will also touch on global trends.
Official figures put unemployment in the United States somewhere between 9 and 10 percent. But the official figures use a very different measure for unemployment than was used during the Great Depression and for many decades afterwards.