No one wanted to buy and those families that were able to pay their mortgages found it useless since the value of their house has decreased. This led the banks and investors in a great need to sell the houses but there was no one who wanted them due to their decreased value. In return, jobs in the financial sector were being lost and this brought about a stalemate in the economy.
Effects.
Although the financial crisis had a distinct origin - U.S.A - it did not stop there. All countries were affected, including all of the European countries. With the economy slowing down, the production of GDP was also decreasing and banks came into a credit crunch. People started losing trust in governments and banks. The lack of employment in financial sectors started to trickle down to lack of employment elsewhere and unemployment took rise, quality of housing and health decreased and precarious jobs were being created. With less people contribution towards society, measures of austerity had to take place. Shah (2013) describes how most people are concerned that those responsible for the financial problems are the ones that are being helped, i.e. bailed out, but in realty the global financial meltdown has affected the livelihoods of almost everyone in an increasingly inter-connected and globalized world.
The Labour Market and Employment.
Through the crises, the labour market has weakened and in turn all its three broad dimensions have been negatively affected. These are: the overall economic performance of country, the conditions of work, and the characteristics of the job itself (Glassner and Keune, 2010).
A report published by the European Commission showed how the labour markets in the EU started to weaken by the second half of 2008 and deteriorating further through 2009. The EU unemployment rate soared higher by more than 2 percent in the first 2 years after the crises. This posed as a problem to society.
