Why it is best econormy when we have a 1% unenployment rate?

Question

That means 3 millian people are suppressed by the society.

A boss said that.

You said one persent is low,Will you like to see that they are placed in public shelters, or to commit crimes against you or other people and then put to jails.

Answer 1

Because if you have a 0% unemployment rate there wouldn't be enough qualified workers for all of the jobs and workers would be less productive because they knew that they could always get another job.

Less than 5% is considered good because it is normal for people to be looking for jobs and making changes in their lives. For instance, unemployment goes up in June because of all of the college and high school grads entering the work force.

In addition to looking at the number of unemployed, most economists say to look for what the length of unemployment is. Less than 2 months is great.

3 Million people may be suppressed, but there are unemployment benefits to help them until they find their new job, which is the goal.

Answer 2

Aggressive ID gave a really complete answer. Let me be a little more simplistic.

First, the employment rate always depends on calculation. For example, in the US, you only count as unemployed if you are actively looking for work on benefits. Thus, if you have given up, or if you do not qualify for benefits, you do not "count" as being unemployed. Therefore, the 1% figure is several points higher (backing up your point).

On the other hand, in order to expand, the economy needs good, qualified people (looking for work), who can be hired to do a good job. Not by raiding other companies, but by hiring them.

When the unemployment rate gets below a certain point (economists argue where exactly this "point" is, but it is certainly higher than one percent), there are simply too few qualified workers in the workplace.

Meanwhile, as the unemployment rate falls, the compensation for workers increases (supply and demand, there are less qualified people to fill the openings, so wages go up to attract better workers to the company). This decreases productivity (output per doller spent).

So, from an economic point of view, it is always better to have a pool of workers to pick from.

On the other hand, when unemployment is high, there will be less consumption (unemployed people buy alot less than employed people), which slows down demand (actually reduces the demand curve), which slows the economy.

So ... a one percent unemployment rate would be a historic low for most countries, and could actually be bad for the economy. This does not do much, however, for those who are left on the unemployment lines.

Answer 3

There are 3 types of unemployment.

Cyclical - which is determined by the business cycle.
Structural - determined by the structure of the economy.
Frictional - Those moving between jobs etc.

You can remove all those except frictional when the economy is in full employment (before you want an economics lesson, full employment does NOT mean that everyone is employed).

Thus to give an answer you needed to define exaclty what you meant by 1% unemployment. In may countries this would be an overemployment of the labour force.
Three million people may seem like alot, but 1% certainly is not.

Just because you added additional details I'll try and clear up your confusion. If it is frictional unemployment then those people are merely moving between jobs and this is an excellent rate for this type of unemployment.

What country are you from? I only ask because of your spelling mistakes.

Answer 4

Some have already mentioned frictional unemployment. We also have a minimum wage which has an effect on how many jobs businesses offer. With a floating wage scale, wages would decrease until unemployment was very low. It will never be zero unless a socialist government tells you what job to do and for how long. Of course, it sucks if you are way over qualified for that job and could be of better use in another position. That doesn't happen in China especially with women workers.

The education system in the US makes me sad.

Answer 5

Negative sorta boss huh? With those figures it essentially says if you want to work you can. The jobs are out there. Just because you are unemployed it does not necessarily mean you want to work. There are more than you know who work to draw unemployment.

Answer 6

Maybe they don't have a job because the don't spell.

Answer 7

spelling is a big reason people dont have jobs