Question

Why might inflation accelerate as the unemployment rate declines? Have you ever had difficulty finding a job? Why didn't you get one right away? What kind of unemployment did you experience?

Answer 1

Dear Student,

The relationship between inflation and unemployment has traditionally been an inverse correlation. However, this relationship is more complicated than it appears at first glance and has broken down on a number of occasions over the past 45 years. Since inflation and (un)employment are two of the most closely monitored economic indicators, we'll delve into their relationship and how they affect the economy.

Labor Supply and Demand

If we use wage inflation, or the rate of change in wages, as a proxy for inflation in the economy, when unemployment is high, the number of people looking for work significantly exceeds the number of jobs available. In other words, the supply of labor is greater than the demand for it.

With so many workers available, there's little need for employers to "bid" for the services of employees by paying them higher wages. In times of high unemployment, wages typically remain stagnant, and wage inflation

In times of low unemployment, the demand for labor (by employers) exceeds the supply. In such a tight labor market, employers typically need to pay higher wages to attract employees, ultimately leading to rising wage inflation.

* Difficulty Findling a Job

1) Companies are overly selective

These days, that dynamic has changed dramatically. Most employees move from job to job throughout their careers. Companies are no longer as loyal to their employees as they once were. Because of that changed relationship, employers need to get an immediate return from their hiring investment.

2) Outdated Resume - Lack of Skills

For many struggling job seekers, the problem is as simple as their resumes. Employers are looking for resumes that stand out from the crowd, so those old, outdated resumes are not the best option these days.

When it comes to finding a job in 2020, successful candidates will have resumes that effectively showcase their value as employees. Unfortunately, many of today’s job seekers have no idea how to craft that type of resume

*Why Did'nt get you Job right away

1) Competition between candidates

2) Slow Market Growth

3) Recession and Corona Virus

4) Lack of IT Skills

*What kind of unemployment did you experience?

Below are the main type of unemployment

1) The individual was fired or laid-off from a job due to Corona Virus outbreak

2) The individual left the workplace for personal reasons, like maternity leave, injury or illness.

3) Voluntarily leaving a job.

4) Termination due to plant closure / Business Loss

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