Full employment: Difference between revisions
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The exponential growth of the world's population along with the technological development (less need of manual labour) and the globalization of the world's economy in recent years has brought significant changes into our lives including, of course, the labour market. Since there is no capitalist economy known to have achieved full employment, in recent years many governments have implemented what is called a job guarantee, or the employer of last resort (ELR)<ref>Wray, L.R. (2009), pp. 1-13</ref> proposal programs, helping people willing to work who, for any reason, can't find a job in the private sector. The State then has to play this role to guarantee jobs for anybody willing to work. The ELR program will balance the system, growing when the private sector is in recession and shrinking when the private sector grows. | The exponential growth of the world's population along with the technological development (less need of manual labour) and the globalization of the world's economy in recent years has brought significant changes into our lives including, of course, the labour market. Since there is no capitalist economy known to have achieved full employment, in recent years many governments have implemented what is called a job guarantee, or the employer of last resort (ELR)<ref>Wray, L.R. (2009), pp. 1-13</ref> proposal programs, helping people willing to work who, for any reason, can't find a job in the private sector. The State then has to play this role to guarantee jobs for anybody willing to work. The ELR program will balance the system, growing when the private sector is in recession and shrinking when the private sector grows. | ||
Unemployment is closely linked with poverty, social exclusion, racial and ethnic minorities, lower education, inequality, etc. so governments should adopt meassures to erradicate it | Unemployment is closely linked with poverty, social exclusion, racial and ethnic minorities, lower education, inequality, etc. so governments should adopt meassures to erradicate it and be responsible to take all possible steps to achieve and maintain full employment<ref>Natarajan, A. (2010), pp. 42-48</ref>. Among these meassures we can find: | ||
* Education: Individuals with a better education have more chances to be employed and also get better jobs. | * Education: Individuals with a better education have more chances to be employed and also get better jobs. | ||
* ELR programs, as described earlier. | * ELR programs, as described earlier. | ||
Revision as of 16:19, 15 November 2022
Full employment is the economic concept that refers to a situation where the entire active population of a country is working. This situation would imply that the markets are in perfect balance, companies would have no problem finding qualified personnel for their jobs and citizens would find employment at any time.
The concept of full employment[1] is rather theoretical since it is hard to find a real case where unemployment is exactly zero. In practice, the labor market presents many imperfections: the workforce is always changing, and people come and go to work for many reasons such as different interests, moving to another country, starting a new job or studies, etc. It is practically impossible to reach an exact moment in which the demand and supply of labor are equal, but it is an ideal situation, and everything that means approaching it is positive, socially and economically speaking.
Is it possible to reach full employment?
Two major currents of thought diverge in terms of the methodology to follow:
- Keynesianism. The defenders of this current affirm that the supply and demand of the labor system cannot be adjusted automatically, being the State responsible for intervening in times of recession and recovering the employment rate in the country. Keynes thought that unemployment was one of the main faults of capitalism and a natural product of market forces, so it was necessary to apply the right policies to solve it.
- Liberalism. The liberals assure that, for the country to enjoy a situation of full employment, the presence of free competition in the markets is necessary. In this situation, the State would simply adjust the legal framework to defend this free competition and protect business initiatives.
Regardless of each current or individual's thoughts, full employment must be one of the main objectives for each country, despite the impossibility of putting the concept into practice. Work, in many places, is considered a "human right"[2] that all its inhabitants have, so the achievement of this objective is essential for social and economic well-being, and has to be granted.
The exponential growth of the world's population along with the technological development (less need of manual labour) and the globalization of the world's economy in recent years has brought significant changes into our lives including, of course, the labour market. Since there is no capitalist economy known to have achieved full employment, in recent years many governments have implemented what is called a job guarantee, or the employer of last resort (ELR)[3] proposal programs, helping people willing to work who, for any reason, can't find a job in the private sector. The State then has to play this role to guarantee jobs for anybody willing to work. The ELR program will balance the system, growing when the private sector is in recession and shrinking when the private sector grows.
Unemployment is closely linked with poverty, social exclusion, racial and ethnic minorities, lower education, inequality, etc. so governments should adopt meassures to erradicate it and be responsible to take all possible steps to achieve and maintain full employment[4]. Among these meassures we can find:
- Education: Individuals with a better education have more chances to be employed and also get better jobs.
- ELR programs, as described earlier.
- Technological innovation: Creating new fields of employment (i.e.: telecommuting).
- Increase flexibility of working-time.
- Foment an entrepreneurial climate.
- Make wage and labour costs more flexible.
Footnotes
References
- Ginsburg, H.L., Zaccone, J., Goldberg, G.S., Collins, S.D., & and Rosen, S.M. (1997), Special Issue on: The Challenge of Full Employment in the Global Economy Editorial Introduction. Economic and Industrial Democracy, 18(1), pp. 5–34.
- Harvey, P. (2016), What is Full Employment and Why the Definition Matters. Paper Presented at the International Post Keynesian Conference University of Missouri at Kansas City, September 2016, pp. 1-22.
- Jacobs, G. & Slaus, I. (2011), Global Prospects for Full Employment. Cadmus, Volume I, nº 2, April 2011, pp. 60-89.
- Wray, L.R. (2009), The Social and Economic Importance of Full Employment. Levy Economics Institute of Bard College. Working paper nº 560, April 2009, pp. 1-13.
Author: Zaira Bancells Guerrero, Mónica Guijarro Bernabeu, Gabriela Varela Barker
