Drawbacks of recession in the economy Term Paper

Drawbacks of recession in the economy - Term Paper Example 9- paragraph 1). Thus, economics and societal commentators view and gauge other range of variables such as the general welfare of people, level of prices amongst many other economic growth or decline indicators. Therefore, for the purposes of this essay, the paper will focus on the drawbacks of recession to the global economies with a skewed interest in the United States of America. Specifically, the paper would articulate how recession leads to increase in unemployment standards, reduction in the quality of life or welfare and a decline in the price of assets. To begin with, there is the instance and situation of falling output or the national production level. It is imperative to note and mention that once the country produces lesser than the actual potential, the gross domestic product or the aggregate measure of value of a country’s wealth would be reduced. The amount of real Gross domestic product directly relates to the amount of income that the same person or entity would be realize. As a result, the amount of wages would be skewed to grow in a slower rate or decline altogether. There stems a combination of employees incentives and urge to create a structure within the government to redistribute resources (Palley, 2013, p. 25-paragraph 2). For instance in the United States of America, Walmart retailers as an employer to many people has in the past established a program of rewarding its employees through bonuses and continuous salaries and wage increase. However during the time of national recession, the employees of Walmart were neither given bonuses nor salary increases. Instead, there was a reduction in their cumulative financial benefits such as being given only their basic salaries and wages. Thus, in all aspects and fairness, it would be imperative to note that the wage levels and bonus of the employees reduced. Secondly, during times of economic