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Unemployment is 'involuntary' when the price is above its…

“Unemployment is 'involuntary' when the price is above its market clearing level. Workers are unemployed because jobs are not available at the prevailing wages, period. The only recourse is to either expand the number of jobs or somehow lower the wage.” quote by Dale T. Mortensen
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“Unemployment is 'involuntary' when the price is above its market clearing level. Workers are unemployed because jobs are not available at the prevailing wages, period. The only recourse is to either expand the number of jobs or somehow lower the wage.”

Dale T. Mortensen

About This Quote

This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.

Unemployment is involuntary when wages are set above market clearing, leaving workers jobless.

In simple terms: High wages cause joblessness.

Key Takeaway

Adjust wages or create jobs.

Themes

economics labor market policy

Mood

analytical neutral

Type

economic policy

When to use this quote

  • policy design
  • employment strategy
  • business planning

Key Concepts

Market equilibrium wage theory

Questions to Reflect On

  • How can policy balance wages and employment?
  • What alternatives exist to wage reduction?
A Different Perspective

Lowering wages may reduce living standards.

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