UK: How to get to full employment?

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Full Employment

George Osbourne says he is going to "fight" for full employment. Yet he is not prepared to say what he means by "full employment".

Surely this goes against Conservative ideology. They are the party that are against unions, they like to keep wages low, and they say more competition produces better results.

With full employment wages may have to rise, union power would become stronger, and there would be no competition for vacant jobs!

What is this man talking about? Are the Conservatives in Britain simply saying things that sound good to the electorate? Or could there be something more sinister behind their policies?

I'm guessing he has in mind something more like 'minimal number of people on JSA'. It's just "full employment" sounds better. So, make it very hard and unpleasant to claim, sanctions at the drop of a hat, yet wider spread of zero hours contracts, lots more workfare, people going self employed and scraping by etc.

"Mr Osborne declined to define full employment, but said people between jobs or unable to work or with caring responsibilities would not be included."

So yeah, I'm guessing it's mostly related to JSA.

I can't see a Tory being bothered about making sure there's lots of new, well paid, good work available. These are people who think we need a race to the bottom.

So they are looking to further disguise the number of people without employment. What makes me angry is that a lot of people in the UK will believe what they are told.

We need a new category to count unemployment.

I think we should count those out of work and claiming JSA, but also those who are on ESA and are looking for work.

My daughter doesn't claim anything but she is still looking for work.

They should just count everybody who is and who isn't claiming, because like my daughter some of them will be classed as unemployed and looking for work.

If that is his goal, why is he so keen on forcing people who clearly cannot work into the job market?

I think I remember him backtracking somewhat when Nick Robinson pressed him and he said "we want to have the lowest unemployment of any major economy". Erm... so not full employment at all then?

Even if one disregards the politically controversial concept of NAIRU (non-accelerating inflation rate of unemployment), an unemployment rate of zero is simply not realistic in modern society.

Frictional employment alone suggest that - even if there is a job for everyone - there will always be some level of unemployment. Seasonal unemployment (as in tourism and construction) is also a somewhat natural feature of the economy.

Last time I checked, standard textbook assumptions about the "natural" unemployment rate in the US sits at around 4 percent. It is likely higher in many European countries due to relatively high minimum wages and restrictions on hiring and firing.

The natural rate may even be increasing due to increasing educational demands in society. Since the cognitive ability of humanity has a strong genetic basis, one cannot simply "educate" a society away from this problem.

Actually, many European countries have a high rate of hidden unemployment. If you account for everyone on rehabilitation, on disability for stuff they wouldn't get disability for in other countries, and so on, the real unemployment rate in Norway is at roughly ten percent (compared to a 3.5-4 percent nominal unemployment). In many European countries, you could until recently use employment agencies as a backdoor to social dumping, unfair layoffs, and all that.