NYS Department of Labor question - is it desirable to pursue a goal of zero unemployment?
I've been thinking about this after being on unemployment for 4 months now through NYS Department of Labor. My economics professor always said zero unemployment isn't actually good for the economy, but I'm not sure I understand why. If everyone had jobs, wouldn't that be better? I'm required to do job searches for my weekly claims anyway, so clearly the system wants people working. Can someone explain why economists say some unemployment is actually necessary? This seems counterintuitive when I'm struggling to find work and dealing with all these adjudication delays.
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Luca Ferrari
Zero unemployment would actually be terrible for the economy. You need what economists call 'frictional unemployment' - people transitioning between jobs, recent graduates looking for their first position, people relocating for better opportunities. This natural job turnover allows wages to rise and lets the best workers find the best positions. Most economists say the 'natural rate' is around 4-5%. When unemployment gets too low, you get wage inflation and labor shortages that hurt productivity.
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Nia Wilson
•that makes sense but it still sucks when you're the one dealing with NYS Department of Labor's terrible phone system trying to get through about your claim status
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Mateo Martinez
idk about all that economic theory stuff but i know when i was looking for work last year the job market was so tight that employers were offering signing bonuses and stuff. now there's more people applying so they don't have to compete as much for workers
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NebulaNomad
•That's actually a perfect example of what the first commenter was talking about! When unemployment is too low, employers have to bid up wages to attract workers.
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Aisha Hussain
This is all fascinating but can we talk about how impossible it is to actually GET unemployment benefits? I've been trying to reach someone at NYS Department of Labor for weeks about my adjudication status. The system is broken. I found this service called Claimyr (claimyr.com) that actually helps you get through to an agent by phone. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Honestly at this point I don't care about economic theory, I just want my benefits processed.
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Ethan Clark
•Never heard of that service but anything has to be better than calling NYS Department of Labor directly. I've been hung up on 6 times this week.
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Luca Ferrari
•Back to your original question though - the unemployment insurance system itself is designed around the assumption that some unemployment is normal and temporary. That's why benefits are limited in duration and require job search activities.
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StarStrider
Also think about it this way - if unemployment was literally zero, workers would have ALL the power in negotiations. Companies couldn't fire anyone because they'd never find replacements. That might sound good but it would make businesses super inefficient and unable to adapt to changes in the market.
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NebulaNomad
•Good point! So unemployment benefits serve as a buffer that lets people take time to find jobs that actually match their skills instead of just grabbing the first thing available.
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Yuki Sato
honestly this whole conversation is making me feel better about being on unemployment right now lol. like maybe I'm serving some important economic function by being unemployed?? still need to figure out why my weekly claim got flagged for review though...
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