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Ugly Face Behind Low Unemployment

Updated : December 12th, 2022

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 a 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 to 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 employee 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. Make the most of your unemployment claims and connect with your Unemployment to help you find your next job!

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  1. Was just called from my job and told me to claim unemployment information we can talk at phone number 207-447-8741 thank you

    • Melinda,

      Please note this is a private forum and we do not have links with the Unemployment Office. You may contact the Claims Center for further assistance.

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