auditor0007
Gold Member
Do you consider unemployment bad? My friend claims that capitalism must have 5.5% unemployment to function effectively. The idea he summarized was that with unemployment lower than 5.5%, this would lead to massive inflation and that would decrease the value of wages of all the workers. Does it have any basis? This fall we had something about 10,7%? Obama was not good at solving the problem. How do you see this unemployment nowadays?
4% is the threshold used by most economists. Once unemployment goes below 4% it becomes much more difficult to find workers without offering higher pay, and then you are just stealing the employee from another employer, so it can create a cycle that puts some pressure on prices. Businesses really do not like it when unemployment is this low.