Which factor is commonly seen as detrimental to achieving sustained economic growth?

High unemployment rates are commonly seen as detrimental to achieving sustained economic growth because they indicate that a significant portion of the workforce is not engaged in productive activities. When people are unemployed, their skills and potential contributions to the economy are untapped, leading to a loss of potential output. This not only reduces the overall level of demand in the economy, as unemployed individuals have less income to spend, but it also affects consumer confidence and can lead to a downward spiral of reduced investment and consumption.

Sustained economic growth requires a healthy labor market where individuals are employed, contributing to production and consumption, which in turn stimulates further economic activity. High unemployment may also lead to increased government expenditure on welfare and reduced tax revenues, thereby constraining public finances and investment in infrastructure or services that could promote growth.

While excessive regulation and too much government oversight can negatively impact economic activity by stifling innovation and creating barriers to entry for businesses, high unemployment directly affects the labor force's capacity to contribute to economic growth effectively. It undermines both current economic performance and future potential, making it a significant concern for policymakers aiming for sustained economic development.