Definition of Full Employment
On the face of it, full employment would seem to be a straightforward concept, meaning that everybody who wants to work is employed. However, like many concepts bandied about in political circles, it can take on slightly different meanings depending on who's doing the talking. Economist.com observes that while most governments have a stated objective of full employment, "they rarely try to lower unemployment below the nairu: the lowest jobless rate consistent with stable, low inflation."
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Is It Possible?
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The desirability of full employment is hard to question, but is it a goal that can be attained without paying too high a price? The debate on this subject has been the subject of controversy for decades in the United States and other countries. In the United States, federal legislation designed to pave the way for full employment has been on the books for more than half a century, but the goal remains elusive.
Post-World War II Statute
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Even before the end of World War II, U.S. legislators on Capitol Hill sought to hammer out a law that would create a way to put all the returning servicemen to work without displacing all those---including women---who had filled jobs during the war years. The legislation, originally introduced as the Full Employment bill, was passed in 1946, but by that time its utopian aims had been recognized, and the resultant statute was called the Employment Act of 1946.
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60 Million Jobs
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Commerce Secretary Henry Wallace was one of the most outspoken proponents of full employment as a goal toward which the federal government should work. Wallace, who served briefly in the administrations of both Franklin D. Roosevelt and Harry Truman, wrote a book titled "60 Million Jobs." In it, he estimated that it would take 60 million jobs to achieve full employment in the period between 1949 and 1951.
Humphrey-Hawkins Act
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In response to rising joblessness and rampant inflation in the early 1970s, Congress in October 1978 passed the Humphrey-Hawkins Full Employment Act, which again set full employment as a goal. More realistically, however, legislators recognized that while full employment was a worthy target to shoot for, it was probably not going to be achieved literally. In effect, the legislation said that for its purposes, an unemployment rate of 4 percent or less by 1983 would be considered full employment.
An Elusive Goal
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Despite the nobility of the concept and the best of intentions on the part of American legislators, the realization of full employment remains elusive. Looking at annual unemployment rates in the years from 1948 to 2006, the lowest jobless rate achieved was 2.9 percent in 1953. And the annual average unemployment rate for this span of 59 years works out to a still hefty 5.6 percent. It should also be noted here that the Bureau of Labor Statistics unemployment rate tends to understate actual joblessness, because it doesn't include those who are out of work but so frustrated that they are no longer actively pursuing employment.
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