So called “full employment” is a totally arbitrary number. Back in the day and all the way up to this time (apparently) the labor force was considered to be at full employment when the jobless rate was around 6% or a bit less.
Like they say, liars figure and figures lie.
The labor market and unemployment rate have fallen into a pit of rare circumstances....where optimism is highly charged.
Take up Huntsville Alabama...with the past two months of 2.1-percent unemployment. If you just have a high school diploma, fill out a resume, and pass a drug test....you can get a $12-to-$15 assembly or industrial job in the area. Add to this...the big incoming industry has yet to open up their factory (2020 is the big year) and the mayor is hyped up to go find more companies to move into the area. They might actually get the unemployment rate below .9-percent in a year.
That's exactly right. The concept of "full employment" is commonly misunderstood. You can have full employment even if 40% of the working-age population is not working ... or when 99% of them are.
The term "full employment" is used to describe a scenario where the number of available workers in various industries across the board is so small that we see upward wage pressure that exceeds inflationary trends by a wide margin.
If our economy has 40 medical doctors and 10,000 ditch diggers but we need 60 MDs and only 2,000 ditch diggers, our unemployment rate might be very high but we might still have "full employment" because ditch diggers can't become doctors overnight and the demand for the MDs will drive up their wages considerably.