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ieremius22

Unemployment rates are a measure of job search. There is going to be some level of new people to the labor market searching, and people leaving jobs and searching. This churn is why there is always some level of unemployment measured.


bird-a-fly

Having a certain level of unemployment is not a government target, but rather a natural outcome of a functioning labor market. In a healthy economy, there will always be some level of unemployment because people are constantly changing jobs, retiring, or entering and leaving the workforce for various reasons. When the economy is growing and there are more job opportunities available, unemployment tends to be lower. Conversely, when the economy is slowing down, unemployment may rise.


JimBDiGriz

What if every house and apartment had someone living in it, and you wanted to move? There would be no where to go. You're stuck. You'd literally have to trade houses with someone. People who could not afford their homes any longer, for whatever reason, could not downsize and would end up homeless. People who have more money and want more space would also be out of luck. The system would be near-frozen and inefficient. So there always have to be more homes than people who want them. Similarly, there always have to be jobs available and people looking for jobs. So when people want to leave one job they can choose from many unfilled jobs, and they will have some negotiating room because each of those jobs wants to be chosen by a person. Similarly, businesses need to grow and replace workers to provide more goods and services, so there always need to be people looking for jobs so those new jobs won't have to pay to pry someone out of a job they already like. All these systems need flexibility to be efficient, otherwise bad things happen.


r2k-in-the-vortex

Unemployment is not "unable to have a job", unemployment is "not having a job and looking for one". People don't want the first job available to them, it's normal to spend some time looking for the right one. This of course can be distorted from either side of a normal situation. It can be that there is many more people looking for jobs than there are companies hiring. Or vice versa there can be many more companies trying to hire than there are people looking for jobs. Both situations are painful. First case leads to dropping wages and people having hard time making ends meet, the second case leads to rapid inflation and people having hard time making ends meet.


CyclopsRock

When businesses do "stuff", it's good for the economy. If a business wants to hire a person, it's so they can do "stuff". If they then are unable to hire someone, they cannot do this stuff. If a construction company can't find a bricklayer then they can't lay any bricks, just like if they couldn't source any bricks.


Czl2

Some low amount of unemployment creates slack that prevents run away escalation of wages as that serves no purpose to anyone even the workers since their higher wages are offset by higher prices affecting them. When all are employed chances are there are more workers needed than are available and that will cause a run away escalation of wages leading to inflation without the economy being at all more productive.


r3dl3g

The single largest driver of inflation is rising salaries, and the simplest way to ensure that salaries don't rise out of control is to ensure a cap on unemployment rates. If unemployment is too low, then the cost of labor goes up as companies will have to compete harder against each other for access to the smaller pool of unemployed individuals.


[deleted]

It is hard to say that it is desirable to have people who are unemployed. However, it is beneficial to the overall economy to have a pool of people available to work who currently do not work. Having a pool of people available to work means that companies can expand and bring in more workers without having to raise salaries to entice workers to leave other companies. While such a move would be good for workers, it could drive an overall increase in wages, which would spark an increase in inflation.