Unemployment is one of the most pressing issues of the American economy. It is often portrayed as a negative thing, with the idea of people not being able to secure a job and provide for their families being hard to accept. However, there are certain circumstances in which rises in unemployment can be beneficial, with certain benefits to the economy and overall wellbeing of the nation’s citizens. In this article, we will explore a few of the reasons why American unemployment needs to rise.

Short-term Benefits

  1. Stimulate Wages: One of the primary benefits of a higher unemployment rate is that it can stimulate wages for the average worker. When the rate of unemployment increases, higher wages become more attainable for the average worker, as there is heightened demand for the available labor. Employers may be forced to pay higher wages in order to attract workers and, as a result, the average person’s wages can be increased.

  2. Reduce Inflation: Another short-term effect of a higher unemployment rate is that it can reduce inflation. Inflation usually occurs when economic growth outpaces the rate of employment. If there is an increase in the amount of people looking for work, demand for goods and services can decrease, which will lead to lower prices and eventually a drop in inflation.

  3. Labour Mobility: A higher unemployment rate can also increase labour mobility, which is important for the long-term sustainability of the economy. Labour mobility reflects the rate of workers changing their jobs, whether due to relocating or simply changing jobs. When there is a higher rate of unemployment, workers who are not satisfied with their current situation are more likely to give up their positions and find something more suitable. This mobility allows workers to develop their skills, giving them the tools to be more valuable in the long run.

Long-term Benefits

  1. New Occupations: With an increase in the number of people looking for work, there is more of a need for new occupations and specializations. People seeking employment will have more opportunities to create jobs in new industries, and their demand for certain skills can help create new areas of business and research. This can provide a more diverse economy in the long-run, leading to greater economic growth.

  2. Younger Generation: The younger generation can benefit from a higher unemployment rate as well, as it creates more job opportunities for them. When there is less competition from experienced workers, the younger generation will be more likely to find jobs that match their skills and aspirations. They can also take advantage of internships and apprenticeships, which can help them learn the necessary skills to succeed in their chosen profession.

  3. Greater Productivity: America’s productivity can be improved with higher unemployment as well. As mentioned before, labour mobility will become more frequent, and the average worker will become better skilled as a result. Additionally, with workers now having to compete for fewer positions, they are likely to become more productive and efficient in order to secure jobs and make a living. This increased productivity can lead to more output and ultimately more wealth for the country.

Overall, there are several clear benefits to a higher rate of unemployment in the United States. These benefits range from short-term stimulants such as wage increases, to longer-term results such as greater productivity and new professions. It is important to recognize that rising unemployment doesn’t necessarily equate to a bad economy, and if managed properly a longer-term boost in productivity could be the result. If managed correctly, a rise in American unemployment could be a beneficial thing for the nation in the long-term.