Ugly Face Behind Low Unemployment

Author : Steven De Nazareth

Updated : June 12th, 2019

Ugly Face Behind Low Unemployment

The employment situation continued to blossom under the stewardship of President Donald Trump with more than 2 million jobs being added in 2017 alone. Based on the report in April 2017, 164,000 jobs were added to the past month and the recovery dragged the unemployment rate to 3.9% which is the lowest since 2000.

The unemployment is around 4% since October 2017. The unemployment rate is declining at such a low level that you would wonder if low unemployment is good for the market. Also, some may wonder if the unemployment rate is too low.

To define unemployment rate in simple words, it is the percentage of workers that are unemployed and actively looking for a job. The first question would be to question why the unemployment rate is way too low and whether it detrimental to the economy.



Based on the current trends, the labor market has reached a point where additional jobs do not create enough productivity to cover the costs. This is the output gap and this often refers to slack in the labor market. In an ideal scenario, the economy would have no slack and run at full capacity with no output gap. If there is a negative output gap, then this is based on the number of economic resources in the labor market that is underutilized. At this point, there is a positive output gap where the market is overusing resources and this is where the economy becomes inefficient and the unemployment rate dips. Economists usually suggest that the US unemployment rate is if it is below 5 percent is close to full capacity. This means at 3.9 percent, the level of unemployment is too low and the economy is edging towards being inefficient.

Increase in Wage Inflation

Increase in Wage Inflation

Generally, inflation is great for the economy. But at times, certain industry wage inflation above the natural pace can be detrimental. Sectors like industrial and consumer discretion have constraints with wage inflation and small-cap firms that cannot cope with rising wages.

In normal circumstances, wage inflation is caused by increasing demand for labor with the unemployment rate falling. This means that employers have to increase wages to attract and maintain talent. The worst businesses would face is that rising wages would produce a less talented workforce and reduced productivity.

Lots of Jobs, Not Enough Skills

Lots of Jobs Not Enough Skills

Since there are a lot of jobs being created, there is a point where there is more job than there are people. This means that employers create openings for new positions to work towards economic growth. Some of these roles include software, service, sales, design, and engineering. A lot of jobs from analytics, machine learning, cloud computing and cybersecurity with 4-10X more scarce than the typical role but there are more healthcare and elder care than the usual demand. These jobs demand soft skills and not just the typical technical skills. This means that while there are a lot of jobs there an increasing gap between jobs that are created and the skills and solutions that are got by employers.

Automation: Creating Jobs and Lots of Stress


Contrary to popular belief, AI and robotics are creating jobs and not reducing jobs. There is a demand for people to create AI and robotics. This would include selling, training and repairing these products as time goes on. Though a digital marketer is a great writer and designer, there is no question that analytics and data-driven systems are used in their role.

With the pace of automation, it creates stress on specific technology and how it is implemented. Also, you need to determine what are the tools that are required that you buy into and how it compares to others in the market. There is a lot of room for error when it comes buying the wrong tools and selecting the wrong vendor. While expectations are going to be sky-high the job at hand will be much tougher.

There are hundreds of different corporate learning vendors and tools that range from recruitment and performance management to employee engagement. There are five major ERP vendors that compete for payroll and core HR and picking the right one is the challenge.

Today more than three-fifths of Californians believe that tech firms focus mainly on profits and drain local resources for their own benefit. 58% believe tech companies fail to protect them from security threats, and 67% believe the industry is secretive. At its worst, 60% believe that tech jobs benefit the state and only 38% believe it benefits individuals.

Hiring Difficulty

Hiring Difficulty

One of the toughest challenges that recruiters find is attracting the right kind of people for the job. They arm themselves with HR tech conferences but despite this, there is a 40% increase in the time to hire candidates. This is primarily because candidates are picky trends like job ghosting where candidates simply disappear. There are companies that have reported that people accept the job and simply walk away as they do not understand the role and what they are supposed to work on. The reason for this is because new candidates disappear in the interview process and look for opportunities.

Trends in the World of HR

Trends in the World of HR

There are some major trends that can be reviewed in business leadership and the world of the HR technological market.

Most focus on wellbeing and productivity and this is due to the stress that can be felt in this job market. It is the job of the HR manager or the business leader to make the work easier. This means that they look to reduce clutter and clear goals. In the process, this would simplify the organizational structure and make things easier. The main thing is to reduce clutter and help ensure that managers set clear goals, simplify the organizational structure and make sure that there are enough well-being programs in place. These programs are sure to bring a huge ROI by investing in this area.

The main thing to look for in an HR team is to ensure that the house is in order. Here, talent acquisition research should do more than just transactional recruiting. This means that they take a job requisition opened by a manager and post it on the internet and start the recruiting process. If you are not looking for the employment brand or passively seeking candidates that would fit your culture or creating a talent pool then your casting your net in a pond that is overfished.

If you take your employment engagement problems seriously then you would be in a better position to understand where your employees are coming from. This means that you should bring about a sense of work culture and engagement. The lack of which would hurt your own company. At the same time, you might want to hire, grow or gain market share but this needs to be done in a meaningful way. Otherwise, you might stand to lose your best people and when the next recession takes place you would simply not want to make sacrifices to keep your business growing.

Simplify Technology

Simplify Technology

Though there are several wonderful new AI tools, some are immature and need to be tried and tested. Some of the easy and easily implemented tools include Workday, Oracle, SAP, and ADP. You can learn by experience through platforms where you can share information and learn about each other. At the same time, you should learn to stop buying into more and more communication tools as in time it would make it harder for employees. Some of the best collaboration tools range from Slack, Google G-Suite, Webex, Skype, and Zoom. But you need to determine if you really need all of them.

The Crux of the Matter

The Crux of the Matter

Though you bring together the business leadership, IT and HR, it is important that your business works effectively to solve cross-organization issues. A recent development found that 73% of CXOs rarely work on solving these cross-functional issues. When dealing with low unemployment you need to check on the hyper-competitive job market and the increased need for productivity and career growth that falls in this category. Though economic growth is great, what needs to be measured is how to effectively work and live in this economy and plans for bad times ahead.

While the unemployment rate is at a decade low, it is still a problem with the policymakers. Here the Federal Reserve would adjust the monetary policy to reach the sweet spot of full capacity. This could be faced with challenges from economic and social problems. While an accelerated wage inflation could mean low unemployment but this eats into the profits. At the same time, the economic cycle is setting records with nearly 10 years of growth, the unemployment is at a 30 year low and this relates to how well the economy is doing. This is why the most important role for any organization lies with the HR and how well they can get the right pool of talent even through a low unemployment cycle.

Applying For Unemployment Claims

If you are filing your unemployment claims then you should know how to apply in your respective state by selecting your state from the Benefits by State option. Once you select your state, you can determine how to connect with the Unemployment Office. You will then have to learn how to submit your claim and understand your eligibility and what you stand to gain with the Benefits Calculator. You can also connect with the File Unemployment Community and get your questions answered in this forum. Make the most of your unemployment claims and connect with your Unemployment to help you find your next job!

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  1. Lost my job in 10/2018 due to plant closure, collected vacation and severance pay. Opened a claim in 1/2019. Got an on the job training job through career link in 5/2019 worked one week and became very sick and was off for two weeks VA could not find anything wrong but gave me medication for the symptoms and an excuse to return to work, prior to returning got a call from my recruiter at career link telling me the position was filled so i did not return. Reopened my claim, a few weeks later got a letter informing me the employer had appealed and said i did not return, had a hearing and the employer did not show but i lost and got a 2500.00 over payment. Got a temp job through an agency but have only worked 4 days in two weeks. Reopened my claim and was told i need to earn 2604.00 from current employer before it can be opened, did i do something wrong? Still applying for work but am days away from losing everything, need income to pay bills. PLEASE HELP

    1. Rodney,

      Your eligibility to claim UI benefits depends on multiple factors including monetary eligibility. If you’ve been officially told about the shortage of earnings, there’s nothing much one can do. If you’re still confident of winning the appeal, please make a strong case.

  2. The hours at work have been cut due to lack of business for every department.
    So all full-time positions are now part-time.
    How do I file for partial unemployment?
    The only options I see (in Texas) are for full unemployment.

    1. Eric,

      You should be able to claim partial UI benefits. Please consider applying online until full hours are restored.

    1. William,

      If everything goes well, it should not take more than 7-10 business days (waiting week). Please call the Claims Center for more.

  3. I was employed by a VA company for 5 years, my contract ended yesterday (07/31/19), however, I worked remotely for those 5 years and live in FL, which state do I apply to for my unemployment benefits?

    1. Oscar,

      Please check with your employer if they remitted UI taxes into the system. Contract workers are generally not eligible.

        1. Oscar,

          In that case, please go ahead and apply if your employer remitted UI taxes into the system.

    2. You apply in Virginia…however, I worked seasonally and they used a ‘quarter’ that was empty, so even though my employer paid in, I only got a 1/3 of what I should have received. Figured that out later :/ They will also question WHY you aren’t able and available to work IN Virginia. They froze my account for about a month.

  4. I worked 37 years with the same company in Texas. On July 2nd of 2018, I was let go due to workforce reduction. I signed up for benefits several months later and now have drawn my 26 weeks of benefit. Is there any program currently open in Texas or federally that will extend additional money while job seeking?

    1. Lonnie,

      The E.U.C(Emergency Unemployment Compensation) remains expired. There is no extension available. Please inquire further with the labor authorities in your state by calling them.

  5. I have been an employee of my company for 34 yrs. My position is being eliminated but I have been offered another position for less money. It is a much more physical job that I am not sure I can perform well. I am 75. If I try to fulfill the position and cannot do it, will I still be able to get benefits if I quit? They want me to try it for a couple of weeks to see if I am strong enough and if I can afford the cut in pay.

    1. Lynda,

      I suggest you call the Unemployment Office to find out about eligibility before making a decision on continuation.

      1. I recently lost my job..i was late for work and they took me off the schedule..never told me i was fired..didnt ask for uniforms back. Another cook was andd has been late for work and he didnt get taken off the schedule.can i still get unemployment?

        1. Kandie,

          Please note UI benefits are only offered to claimants who lose employment due to no fault of their own. You can call the Unemployment Office for clarification.

  6. Are there any training benefits or programs that will pay for an advanced degree, such as a PhD which is needed to become more employable?

    1. There are multiple training programs administered by the Labor Department in each state. For more info, please call visit the official website of the Unemployment Office.

  7. I’m about to exhaust my Unemployment benefits. I was laid off from my first job and
    found employment then I lost my job and became unemployed again. I applied for benefits and have have almost exhausted my benefits but have not found employment. Can I file for an extension?

    1. Deanna,

      The E.U.C(Emergency Unemployment Compensation) remains expired. There is no extension available. Please inquire further with the labor authorities in your state by calling them.

  8. After reading your article it’s still not clear to me about requirements surrounding moving to another state and completing/continuing to collect. I have 8 weeks eligibility left, I am moving from MA to FL. The end of your article says: “Since it’s all virtual (online), you may still consider the option of continuing your claims from the base state even if you move to a different one until completion. As a responsible claimant, it’s your duty to inform the base state about your movement to ensure there are no hassles in the near future.”

    So it sounds like even once I am in new state I am eligible to continue to collect from my base state. I can just continue to do my required weekly job search and reporting to and filing in my base state (I do it via phone call-in). No need to complicate things by doing some crazy state transfer of benefits. Benefits also done via direct bank deposit and no need to change anything. Do I even need to tell my base state I am now living in a new state? Why? Thank you.

    1. Paul,

      For the ease of understanding, each state has its specific rules and laws with regard to administering Unemployment Benefits. It might be an obligation for a claimant to inform about the movement. For clarification, please call the Unemployment Office and speak to a representative.

  9. I was recently fired from my work 25-June-2019/due to me not meeting their “standards/ expectations” i submitted my UE claim on 28-June and have not received any pay as of today, 19-July. The status is currently “adjudication in progress,” my question is, should i be worried this will be denied? I read the FAQ on the UE webpage and it said only a couple applications require the adjudication process. How long does this process usually take to get the final answer of whether I’m denied or approved? The website stated it susuallt takes ~25 days for the adjudication process, does this mean once that’s done then i still have to wait another 2-6 weeks for final processing after? THANK YOU SOO MUCH to whomever is able to provide me with some answers/ input.

    ** this is my first time ever being fired or having to file for unemployment so i really have nooooo idea what is standard or normal or whatever. I feel like an idiot with my simple questions but it would bring me so much relief having them answered, truly

    1. Talia,

      I can understand your reason for the anxiety. Adjudication is a fact-finding process where both the claimant and the employer will get an opportunity to present their case. During this process, make sure to produce supporting documents that amplify your stance. For all you know, the adjudication can be a lengthy process.

      Best Wishes!

  10. I was permanently severanced from my job due to a Co. Reorg & received my last severance pay last week. I called UE & was told that I should now do my application online since I will no longer be getting funds & still without a job & that this coming Sunday regardless of knowing if I will or will not get benefits yet that I should still file a weekly claim in case of UE back pay.
    So my question is, do I still have to report 4 jobs applied to within this week, even if I do not know if I will be approved/denied for benefits until possibly next week anyway?

    1. Lynda,

      You should continue to report the job applications as long as you’ve been asked to do so. There will be a “Waiting Period” and the first payment will take about 7-10 days after which they’ll flow much quicker. Please call the Claims Center for clarification.

  11. I tried to transfer from one state to another. When I left Montana I was told there would be no problem transferring. When I arrived in North Carolina I had trouble reaching the area manager by phone. When he finally called me back he said to meet him for lunch to discuss when and where I would be working. He did not show up for lunch. Then he never returned any of my calls. I went PA to visit a friend a few weeks later and tried there. I met with the hiring manager and was told there should not be a problem doing the transfer since I was still in the system. I called the store a few times and they said it was still pending. Then I was terminated without even a phone call. Am I eligible for unemployment and if so do I file in Montana or North Carolina. I still have a Montana drivers license but I am living in NC.

    1. Stacey,

      As long as you were unemployed involuntarily, you should be able to claim UI benefits. Please consider applying.

  12. I have worked for 32+ years and recently have become unable to work due to health reasons, so I have had to resign from my job. I have contacted SS and will be able to apply for disability but it will take awhile to process. Can I apply for unemployment benefits? I live in WV.

    1. Sandra,

      UI benefits are only extended to claimants who lose their employment due to involuntary reasons. Please reach out to the Unemployment Office for more.

  13. I had to quit my job at Walmart in Fairmont West Virginia and moved back to my home state ky, I’ve got a son with drug problems and 3 older sisters that are not doing so well in health cause of their age. I didn’t understand about the transfer part they had at Walmart that I could put a date when I could start back because of my car problems I thought when I left I had to go in like in s few days, I’ve applied here at Walmart in Winchester ky 40391 two times already plus dollar store, speedway, truck stop, bp, a few other places it’s been going on 7 months without a job I live with my son and its getting harder on him paying rent and utilities and food, not to mention our personal hygiene stuff I really need help I have no income coming in to help him and his wife out I get foodstamps and Medicaid I was praying I could qualify for unemployment PLEASE HELP!!!

    1. Vicky,

      I can understand your situation. Unfortunately, UI benefits are only extended to claimants who lose employment due to involuntary reasons. Please call the Unemployment Office for further clarification.

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