There’s a little bit of irony in reporting triumphantly on low levels of unemployment while we’re oil the midst of a multi-year labor shortage. But the United States has the lowest unemployment rate in more than half a century. How can we fail to celebrate?
Manufacturing in particular added roughly 19,000 jobs so far this year, doing our part to get the unemployment rate down to an amazing 3.4%.
Why not zero unemployment?
Zero unemployment is not actually the goal. The unemployment rate is the percentage of adults who are not working. Some of these people are full-time students, new moms, or people who have decided to quit their jobs and finally write that novel they’ve been planning for years.
These people are not actually unemployed, in the sense that they are not looking for work. However, they probably will be seeking jobs at some point in the future. They are not permanently retired or out of the workforce because of severe disabilities, so they may still show up in the unemployment figures. They create the “natural unemployment rate.”
If the unemployment rate were zero, all of those people would be in paid jobs against their will.
Why is unemployment so low?
We know there has been a labor shortage, particularly since the pandemic. Before that, were had a skills gap, which now seems like a bit of a luxury. Manufacturers now aren’t moaning about not having highly skilled job candidates. Instead, they are moaning about not having any job candidates.
Not surprisingly, wages rose faster in manufacturing than in other fields this year.
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