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Low Unemployment: A Package of Good and Bad News

Posted by Luis Orlando Colon Rivera on Sep 27, 2018 10:17:53 AM

In 2008, our country's economy was at its most critical point since the Great Depression of the 1930's. Caused by deregulations in the financial industry, the Great Recession was characterized by a significant drop in the value of housing, causing a dramatic fall in the consumer's consumption and business investment.  It was hard to find a job, the unemployment rate peaked at 10%, and many businesses closed or filed for bankruptcy protection.

Ten years later, our country is living a historical irony: there are more jobs available than people looking for them. In the last month, approximately 201,000 jobs were created, while the unemployment rate remained around 3.9% - the lowest point in the last decade.

At first glance, this may appear to be good news for society.  It's a package that comes with opportunities, but it also brings some threats that could affect the entire country in the near future.

| The Good News |
1) An Open Door to Opportunities

Job offers open new opportunities to more people, especially for those who have been struggling finding jobs.  This highly impacts those who are part of the marginalized sides of the labor force: the less educated, those with disabilities, and ex-offenders.  As a result, the national competitiveness for jobs increases by creating a knowledgeable and more capable society.

2) Competitive Salaries
Low unemployment may result in a correlation with wages: an employer may need to pay more to attract and/or retain workers. Organizations will start demanding more workers, so they have to increase wages in order to keep their current employees and attract new talent.

3) A Chance for Businesses to Grow
As people gain more purchasing power, business opportunities emerge.  New markets can be created, and the existing markets can expand.  

| The Bad News |

1) Slow Down of Economic Growth
If there aren't enough job seekers in the market, employers will experience difficulty when filling open positions. If they are not able to satisfy the demand, it could result in an overall economic slowdown.

"The U.S. labor market has tightened to the point where they are having tremendous difficulty finding qualified and available workers," says RSM Chief Economist Joe Brusuelas.

2) Interest Rates Increase
This is an effect of the increase in wages.  The Federal Reserve could raise them to avoid a potential increase in inflation as wages grow.

3) Slowdown of Productivity
An organization may face the risk of decreasing their productivity level when there is a low unemployment rate.  For example, if there was a high unemployment rate, the right way to stay alive in a lack-of-purchase-power society may be by becoming as productive as possible: staying late, working hard, and meeting the goals.

I heard somewhere that the fear of job loss can inspire people to work harder.  I do not agree that this must be a pillar inspiration to do great, but as a fact, it may serve as a productivity engine.

With this being said, growth is a good thing.  However, growth can sometimes bring serious challenges that, if not handled properly, can throw a business overboard (read the case of Kind).  It can produce a massive effect in the families that have helped your business to stand where it is.

Prepare yourself, set yourself up with the right tools and partner with the right people.  Create a plan to maintain and increase the competitiveness of your organization. Start making history!


To help out, we have created a quick guide to help you sort through the process and offer you some best practices to utilize your company culture to sustainably upscale your hiring process. Each chapter comes with 3 easy, actionable steps that can help ensure your businesses’ growth healthy.

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Interested in partnering with MAU now that you know the guidelines? If you're looking the best staffing agency to assist with your staffing and recruiting needs, contact us today.

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Topics: Recruiting, Unemployment, Economy