Last Updated on January 24, 2019
(Recent discussion on the US labor market)
“Full employment” refers to the job market and how it recovers from a recession. As the Labor Department releases the latest jobs data, the figures are expected to show that employers added even more workers in January. However, despite the positive outlook, the phrase doesn’t tell the full story for millions of Americans either still out of work or who are looking for full-time work.
What is full employment and what does it mean?
According to economists, it’s when the number of people seeking jobs is almost in balance with the number of openings. This, however, doesn’t mean that the unemployment rate is zero (which would not be realistic).
If the economists don’t mean zero unemployment when they use the phrase “full employment,” what do they mean?
A healthy job market has an unemployment rate between 4.6 percent and 5 percent. While there is workforce movement in every business (some workers are quitting, some are getting hired), there is no need to worry.
Is it really fair to use the term “full employment” when that doesn’t seem to match the reality that a lot of people are experiencing?
Unemployment is very regional. While in West Virginia, there are counties today with unemployment rates of 12 percent or even 13 percent, in California’s Silicon Valley, the rate is virtually zero. Geography does make a difference.
In addition to age and location, education is the biggest determining factor in the unemployment rate.
Today, for younger, tech-savvy, well-educated people, employment is not a cause for worry and 2016 should be a great year for job hunting. However, for people in their 50s with outdated skills or teenagers with relatively little education, the phrase “full employment” is unattainable.
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