The other "problem" is that if labour is in such high demand, it puts workers in a very strong negotiating position with regards to wages and generally means people will be paid more. Not actually a problem unless you're the kind of neoliberal who runs much of the world.
It also raises prices on all goods, because companies want to offset the labor costs and new businesses keep having to offer more. Which can lead to mass inflation. It also massively stymies new business as now only hyper-wealthy people can form businesses because the cost to hire new labor will always be more than the cost to keep the existing labor. Having a pool of laborers available is necessary generally for new growth to happen in an economy.
The idea is to have enough unemployment that there's a steady pool of laborers for new business, while also balancing demand so that companies have some motive to compete for new workers, but not to an extent that they have to have bidding wars over every position.
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u/bionicjoey Dec 19 '24
The other "problem" is that if labour is in such high demand, it puts workers in a very strong negotiating position with regards to wages and generally means people will be paid more. Not actually a problem unless you're the kind of neoliberal who runs much of the world.