That looks like good news, but there are some troubling folds to this. Unemployment is a percentage of the labor force, that is, the number of people either working or looking for work. And the labor force has been dropping for two reasons. First, the population is growing more slowly overall (in part because of reduced immigration). Second, the participation rate - the percentage of people in the labor force - is also decreasing. Some people are giving up the job search, going back to college, or (importantly) retiring early, which (while lowering the unemployment rate) is bad news for the economy.
This relates to what we discussed in class today. Unemployment is a surplus of labor. What happens when less labor is demanded than supplied? Here we're seeing one possible consequence: fewer people are willing to supply their labor anymore.
Which leads to some tough questions. Is this a serious issue? How can it be dealt with?
1 comment:
I remember Mr. Silton saying that unemployment is the surplus of labor also. I think that when less labor is demanded than supplied, the current workers will be paid more but will be forced to work longer hours into overtime. This could take a negative effect of making more people want to quit because they cannot handle their working conditions anymore, this however is a thought. I think that it is better for people who quit looking for jobs and go back into college. I think that if they pursue a better education, they will be able to get jobs that are demanded with higher education levels. It will also make it easier for them to acquire jobs after because they will have more knowledge and I feel like that will be very attractive to employers. So I don't feel like the falling unemployment is a bad thing, that it is a good thing as it should sound.
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