[lbo-talk] "Is 0% unemployment possible?"

[B.]

So how does Yahoo!'s answer pan out? - B

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>From http://ask.yahoo.com/ask/20041209.html

Dear Yahoo!:

Is 0% unemployment possible?

Gerard
Foster City, California



Dear Gerard:

Not only is 0% unemployment impossible, it's not
recommended. A healthy economy will always include
some percentage of unemployment. There are four broad
types of unemployment:

    * Frictional unemployment: This is simply the time
it takes a company to match a qualified job applicant
with the right position. It also includes people who
are between jobs.

    * Seasonal unemployment: Certain industries are
more affected by the weather than others. Construction
and agriculture, for instance, reduce workforces in
the winter.

    * Structural unemployment: This is unemployment
that results from fluctuating consumer taste and/or
technological innovation. If a worker has the
opportunity to learn new skill sets, or move to a new
employer, that's OK. If not, it can be problematic --
witness the recent debate over outsourcing.

    * Cyclical unemployment: This is joblessness that
arises from changes in production volumes. Companies
increase or reduce their production according to how
much the economy can handle. Repeated cyclical
unemployment is a bad thing -- it means the economy is
weak and consumers aren't buying. 

Unnaturally low unemployment can actually hurt the
economy by pressuring wages, which can lead to higher
production costs and prices. This excellent article
from the U.S. Chamber of Commerce covers more of the basics.

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"I'm not too worried by hegemony / I know the cadre will look after me" - Magazine, "Model Worker," 1978