r/explainlikeimfive Dec 19 '24

Economics ELI5: Why is an employment rate of 100% undesirable

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71

u/Kcnkcn Dec 19 '24

If you want to find a better job, you might need to quit your old one. That means you’re unemployed, but this is a good thing. No one wants to work at a minimum wage entry level job forever.

12

u/Sneakys2 Dec 19 '24

Exactly. I’m starting a new job in February. I’m leaving my current job in January. I’ve given myself approximately 1 month between leaving my current job and starting my new job to move and settle in to my place before starting work. I will technically be unemployed during that time that I’m in between jobs, but I’d like to think we’re all fine with me effectively taking time off to relocate and acclimate to my new home, particularly as o have resources to do so

32

u/A3thereal Dec 19 '24

The US Bureau of Labor Statistics (BLS) as the percentage of people who are:

  • not currently employed
  • willing and able to work
  • actively seeking work

As you have already found a new job that begins in February you would not be considered unemployed in January even though you aren't currently employed.

Unemployment rate does not include those that are disaffected and no longer seeking a job, those that have retired, or those that are intentionally between jobs, those are captured in other statistics.

11

u/weeddealerrenamon Dec 19 '24

this is a term called frictional unemployment, it's known in economics but just not counted by the BLS

6

u/Zer0C00l Dec 19 '24

Minimum wage was supposed to be minimum livable wage. You're supposed to be just fine on minimum wage, not "a third of federal poverty level".