Wonder Gem rdmcandie wrote:
it doesn't say anything about it being the best, it only states that 0% is essentially unattainable. That does not mean 0% is worse than 4/4,5/5% it simply means it is the lowest realistic numbers. 4/4.5% is not Ideal because in theory you can go lower (see clinton years with under 4% over several various months) it is simply just a more accurate number as it allows for job market fluctuations such as new to workforce/job change/retirement.
Nearly every economist in the world disagrees with you. And while we can ****** over the exact number that is considered "ideal", it absolutely is above 0% (I'm not aware of anyone who places it below 4% in fact).
If unemployment is too low it starts producing negative economic effects. I know that your simplistic view of economics appears to be restricted to whether people have jobs or not, but there really are other factors and those factors do start to matter more under certain conditions (like not enough labor available for any new ventures to work).
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Considering the employment rate is based on a simple are you working, yes, or no, and not a ya but im 18 and still in college, no but I am begining my retirement. When you consider all these factors unemployment rates are generally several .X below the listed number. You can not base an Ideal on variable information.
Setting the language butchery aside, the reported unemployment rate *does* account for people who are 18 and still on college, or who are retired, etc. If it didn't, the real unemployment rate would be much much higher. Unemployment (in this context) is the number of people who are actively looking for a job but who do not currently have one. I'm not sure if you just wrote it wrong, or honestly don't understand what we're measuring here.
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Furthermore, I understood what he meant, I was simply griping at the terminology he chose. He used words Ideal, and said further that under 5% is not good, and 6% is better than that.
Ideal is exactly the correct term. Just because you don't know this doesn't make it any less true.
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Which is entirely false. A lower % means people are working, and maybe even better they enjoy the work they are doing.
Yes. But that also means that if you want to open up a new business, there might not be enough people with the correct skills you need for you to do it. This stifles economic growth.
I get what you are trying to say. However, the basic unemployment rate doesn't really tell us what you think it does. Ideally, we want unemployment around 5% (some argue lower, but that's a matter of opinion), and we want the period of unemployment to be short on average (3 months is pretty good). Low unemployment with long periods is worse than higher unemployment with shorter periods. The reason for this is because there's nothing wrong with someone quitting or being fired if they can get another job within a few months. In fact, that is an indicator of a healthy economy since people are able to shift their employment around and potentially improve their lot in life.
We're much better off if 6% of the people are unemployed, but it takes that 6% an average of 2-3 months to get a new jobs than if only 3% are unemployed, but it takes a year on average to get a replacement. It's not as simple as just looking at the unemployment rate itself.
Also a broader point which you seem to be utterly unaware of, is that this is a range. Unemployment will naturally shift and change within a few percent range all the time, often for reasons that are hard to predict and even harder to control. That range tends to historically be between 4% and 7%. Within that range, we generally view the employment situation to be relatively normal. It's when we get too far outside that range that we should start to worry. That's why a 7.7%, while not "great", isn't something to panic about all by itself (there were other far more troubling indicators at that time). 9.8% is much more problematic. At that point, unemployment rate isn't just an indicator of other economic factors, but now starts to become a causative factor itself. We start to see negative economic effects
because of the high unemployment rate itself.
That's why the increase in unemployment since Obama took office is more of a problem than the rate increase prior to that time. It's also why all of the shifts during the Bush/Clinton/Bush presidencies that you have been screaming about are completely pointless. Those are normal shifts and all within a normal range. Your lack of understanding of what employment rates mean drive you to place great weight on things that don't matter, while ignoring the real problems.
You really need to educate yourself.
Edited, Dec 23rd 2010 3:43pm by gbaji