NYS Department of Labor economist friend explained why 0% unemployment not realistic goal - thoughts?
My friend who works for NYS Department of Labor in Albany was telling me that even though politicians always talk about getting unemployment to zero, that's actually not something we'd want to achieve. She said something about how some unemployment is actually healthy for the economy and that if we had 0% unemployment it would cause major problems. This seems backwards to me - wouldn't everyone having jobs be the ideal situation? Can anyone explain this better? I'm trying to understand the economics behind it since I've been dealing with my own unemployment claim issues lately.
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Miguel Herrera
Your friend is absolutely right. Economists call this 'frictional unemployment' and it's actually necessary for a healthy economy. When unemployment gets too low (like under 3%), you get wage inflation, worker shortages, and reduced productivity. People need time to transition between jobs, and companies need flexibility in their workforce. The 'natural rate' of unemployment is usually considered to be around 4-5%.
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Zainab Ali
•That makes sense but it's still frustrating when you're the one filing weekly claims with NYS Department of Labor every week. Easy to talk about healthy economics when you're not the statistic.
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Connor Murphy
Think about it this way - if literally everyone had a job, then no one could quit to find better opportunities. Workers would have zero leverage for better wages or conditions. Plus new graduates couldn't find entry-level positions because no one would be leaving their jobs. The economy needs some 'churn' to function properly.
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Yara Nassar
•never thought about it that way... so when I was job searching and going through the NYS Department of Labor job search requirements, I was actually part of a necessary economic process?
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Connor Murphy
•Exactly! Frictional unemployment includes people voluntarily between jobs, new entrants to the workforce, and people whose skills are being retrained for new industries.
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StarGazer101
I was stuck calling NYS Department of Labor for weeks about my claim status and discovered this service called Claimyr (claimyr.com) that actually gets you through to agents. They have a demo video at https://youtu.be/qyftW-mnTNI that shows how it works. Saved me hours of busy signals when I needed to discuss my adjudication issues.
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Ava Thompson
•Interesting, might check that out. Still trying to wrap my head around why some unemployment is good though.
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Keisha Jackson
its because if everyone has jobs then employers cant find workers when they need to expand or replace people who retire. also wages would go crazy high because companies would be bidding against each other for the few available workers
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Paolo Romano
This reminds me of when I was on standby status last year waiting for my factory to reopen... even though I wasn't technically unemployed, I was still part of the unemployment statistics. The whole system is more complex than just 'jobs good, no jobs bad'.
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Miguel Herrera
•Great example! Standby unemployment is another category that serves an economic function - it allows companies to temporarily reduce workforce without losing trained employees permanently.
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