Business

Big Auto Drive Unemployment Recommendations Big Auto Drive is a multistate dealership, over the next five years “how will unemployment affect the company'” According to Tutor2u (2010), reports that “most economists agree that high levels of unemployment are costly not only to the individuals and families directly affected, but also to local and regional economies and the economy as a whole. Unemployment causes a waste of scarce economic resources and reduces the long run growth potential of the economy. An economy with high unemployment is producing within its production possibility frontier. The hours that the unemployed do not work can never be recovered” (Tutor2u, 2010, p1). But if unemployment can be reduced, the output of goods can rise leading to an improvement in the economy. According to the statistic from South Carolina’s unemployment data (2010) the unemployment rate rose sharply in December to 12.6% from November rate 12.3% and the national unemployment rate is 10%. Furthermore; James Breece vice chancellor of academic and student affairs at the University of Main states, “that the recession (which is not over is the worst in modern history) it has lasted 25 months and has resulted in the loss of 7 million jobs, and 5% of the national total, including slightly more than 5% of all jobs” (Breece, 2010, para2). Despite the discouraging signs with the stock market falling, and oil prices unstable the signs of a recession are here and it may take longer than 1-2 years to rebound from it. Therefore; Team A recommends. Big Drive Auto should not be in a hurry to hire more employees nor lay off any employees if at all possible. Remember unemployment affects the economy in ways that most people don’t see. If more people are unemployed, less people pay taxes or have spending money for spending. Spending money boosts the economy through taxes which is why everything is taxed. If one is unemployed, they live on what is saved or what unemployment department gives them. This leads to not having the money to buy wants such as a new car, only needs. In turn, businesses such as Big Auto Drive may have to cut prices in order to sell their products. This leads to less or negative profits, and if enough of this happens businesses might have to lay off or go out of business which leads to unemployment. References Russell, E. (20100. UM economist: Recession recovery will take 5 years or more. Retrieved January 25, 2010, from http://bangordailynews.com S.C. Unemployment Data, (2010), Retrieved January 25, 2010, from http://fitsnews.com. Tutor2u, (2010), Retrieved from http://tutor2u.net.ecomics/content/topics/unmeplo.com.