The economy was on the slide in the last few years. As the economy goes down, the hiring in the companies stop and the people who are already working in many of the companies are also thrown out of job. This is because of the fact that the whole process is like a viscous cycle where one problem leads to another as the whole thing is interconnected.
As the economy drops down, there is a overall concern and the people who invest in the various industries pull out their money as they do not want their money to be lost. This causes a drop in the growth of the industries again. As the industrial growth slows, the companies and their management decide to decrease the work force because a huge workforce will increase the expenditure. As the number of people who work in various companies drops, the unemployment increases correspondingly. The production in the industries also slow down and decrease considerably.
When the unemployment decreases, the salary that is earned by the people also decreases on the whole. This can further lead to problems like poor purchasing power by the people. As the people are not able to purchase many things, there is a further decrease in the output from the various industries. This spiral goes on and on until the government does some bailout of the companies. Other than this, the government can also improve the liquidity or the money that is available to the companies to start expanding.
So, the government has to take active steps for the companies to develop and for the economy to develop on the whole. This will help not only the workers in the companies but also the management of the companies. It will also help the country as a whole to develop the economy. This should be the aim of the central banks and the financial regulators of a country.