The text presents the target rate of unemployment as being about 5 percent. Will

Question

The text presents the target rate of unemployment as being about 5 percent. William Vickrey, a Noble Prize winning economist, argued that the target unemployments rate should be seen as being between 1 percent and 2 percent. Only an unemployment rate that low, he argued, would produce genuine full employment that guaranteed job openings for all those looking for work. Achieving a low unemployment rate would, according to Vickrey, being about "a major reduction in the illness of poverty, homelessness, sickness and crime."

a)What is the appropriate target unemployment rate?

b)Explain your position

c) What policies would you recommend to counteract the human tragedy of unemployment? (Radical)

Explanation / Answer

This is a question where your opinion matters. For example: I feel I would be more inclined to argue a 1-2% unemployment rate. With an unemployment rate that low, everyone who wanted a job would be able to get one. Many homeless people currently have to resort to crime to get by, as they would have a difficult time finding work off the street. If roles were reversed -- companies were looking for people more than people were looking for companies as would happen with a lower unemployment rate when workers were scarce -- this would mean anyone with a bit of effort could get a job. This is (a) and (b). For (c), think about the policies that could help bring employment to more people. Perhaps government incentive to hiring new employees and keeping them on board for two or more years?

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