Disadvantages/costs of economic growth
- It leads to rural-urban migration. As the economy grows, people tend to shift from rural areas to urban centers where there are better opportunities as a result of urbanization .This leads to development of slums, open urban unemployment, increased crime rate and poor living conditions in general.
- It leads to technological unemployment. As the economy grows, there is increased use of capital intensive techniques of production which in the long run replaces labour hence technological unemployment.
- Overexploitation of natural resources. Increased production of goods and services leads to over exploitation of natural resources like forests and minerals. This leads to exhaustion of nonrenewable resources hence lack of self-sustainability in the long run.
- Environmental degradation. In a bid to increase the volume of goods and services in the country, there is development of more industries which leads to environmental degradation in form of noise, air and water pollution.
- It promotes regional income inequalities in economy. If economic growth is emphasized without equity, business owners realize high incomes as compared to the employees and the rural peasants. This widens the income gap between the rich and the poor.
- Economic growth involves foregoing current consumption and investing most of the incomes in order to increase output in future. Resources are allocated for the production of capital goods, provision of education, health etc. which increases the productive capacity of a country in future. This leads to a decrease in current consumption of goods and services.
- Occupational hazards. Economic growth leads to increase in level of occupational hazards in form of increased in workloads, high level of accidents at work, occupational diseases etc.
- It increases economic dependence of the economy. This is due to increased borrowing as a way of rising capital for investment external economic dependence. .
- Leisure is foregone. Individuals forego leisure due to hard work required to achieve economic growth yet leisure is vital in improving the welfare of people.
- It accelerates profit repatriation. This is true if production is dominated by Foreign Direct Investments.
- It leads to the loss of craftsmanship. The increased dependence on the use of machines like computers and other capital equipments leads to loss of natural creativity in the long run.
- Breakdown of cultural norms or values. With modernization people tend to adopt western cultures and neglect the good cultural and social values which can bring people together. This undermines nationalism in the economy.
- Brain drain
- Increased debt burden through borrowing
- dualism
CATEGORIES Economics
TAGS Dr. Bbosa Science
