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How much unemployment does society need? Watch

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    In order to keep wages reasonable there needs to be some unemployment in society. What is a reasonable level for a developed country like the UK?
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    (Original post by perfectsymbology)
    In order to keep wages reasonable there needs to be some unemployment in society. What is a reasonable level for a developed country like the UK?
    What the does that mean? Wages being reasonable?

    Wages are always too low as far as I am concerned.
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    Unless you're going to go all Marxist with a 'reserve supply of labour' theory then I would say as little as possible tbh...
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    If mean what level of unemployment bids down wages just enough to maintain stable, low inflation - its about 5% by most estimates, but given such high, persistent unemployment right now, its unlikely that the longer-term unemployed are really proper substitutes for the working, so one would argue this figure could be closer to 6 or 7% for the immediate post-crisis period.

    Right now the OBR say its about 5%.
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    (Original post by Classical Liberal)
    What the does that mean? Wages being reasonable?

    Wages are always too low as far as I am concerned.
    why are wages too low?! LIBERALISM!!
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    I never really thought of wages to be honest.


    You also need a little unemployment for growth potential I suppose.
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    I don't know about an exact figure as I've never formally studied economics, but I've always thought a bit of unemployment is a good thing. Afterall, there is reduced incentive to work productively if there is little competition for jobs.
 
 
 
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