full employment

Examples of full employment in the following topics:

• Defining Full Employment

  • In macroeconomics, full employment is the level of employment rates where there is no cyclical or deficient-demand unemployment.
  • Full employment is often seen as an "ideal" unemployment rate.
  • The full employment unemployment rate is also referred to as "natural" unemployment.
  • As an example, the United States is committed to full employment.
  • Full employment is defined as "ideal" unemployment.

• The Taylor Rule

  • how far economic activity is above or below its "full employment" level, and
  • what the level of the short-term interest rate is that would be consistent with full employment.
  • The Taylor rule advocates setting interest rates relatively high (contractionary policy) when inflation is high or when the employment rate exceeds the economy's full employment level.

• Defining Fiscal Policy

  • Governments use fiscal policy to influence the level of aggregate demand in the economy in an effort to achieve the economic objectives of price stability, full employment, and economic growth.
  • Keynesians argue that this approach should be used in times of recession or low economic activity as an essential tool for building the foundation for strong economic growth and working towards full employment .
  • In times of recession, the government uses expansionary fiscal policy to increase the level of economic activity and increase employment.

• Macroeconomics

  • Full employment occurs when those who are able and willing to have a job can get one.
  • As a result, full employment does not mean zero unemployment.

• The Business Cycle: Definition and Phases

  • An expansion is characterized by increasing employment, economic growth, and upward pressure on prices.
  • A peak is realized when the economy is producing at its maximum allowable output, employment is at or above full employment, and inflationary pressures on prices are evident.
  • Following a peak an economy, typically enters into a correction which is characterized by a contraction, growth slows, employment declines (unemployment increases), and pricing pressures subside.
  • The NBER identifies a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production. " This is significantly different from the commonly cited definition of a recession being signaled by two consecutive quarters of decline in real GDP.

• Aggregate Expenditure at Economic Equilibrium

  • Written out in full, the equation reads: aggregate expenditure = household consumption (C) + investments (I) + government spending (G) + net exports (NX).
  • Classical economics assumes that the economy works on a full-employment equilibrium, which is not always true.
  • In reality, many economists argue that the economy operates at an under-employment equilibrium.

• Shortcomings of the Measurement

  • Unemployment, also called joblessness, occurs when people are without work and are actively seeking employment.
  • The method is criticized because unemployment benefits can expire before an individual finds employment which makes the calculations inaccurate.
  • For example, the unemployment rate does not take into account individuals who are not actively seeking employment, such as individuals attending college or even individuals who are in U.S. prisons.
  • Individuals who are self-employed, those who were forced to take early retirement, those with disability pensions who would like to work, and those who work part-time and seek full-time employment are not factored in to the unemployment rate.

• The New Work Force

  • Between 1950 and late 1999, total U.S. non-farm employment grew from 45 million workers to 129.5 million workers.
  • By late 1999, that sector had grown to 104.3 million jobs, or 81 percent of non-farm employment.
  • In the 1980s and 1990s, many employers developed new ways to organize their work forces.
  • It attempted to link training programs to actual employer needs and give employers more say over how the programs are run.
  • In response to demands from working mothers and others interested in working less than full time, employers introduced such innovations as job-sharing.

• Measuring the Unemployment Rate

  • Unemployment occurs when people are without work and are actively seeking employment.
  • Bureau of Labor Statistics measures employment and unemployment for individuals over the age of 16.
  • U6: the individuals described in U5 plus part-time workers who want to work full-time, but cannot due to economic reasons, primarily underemployment.
  • Bureau of Labor Statistics used the six employment measures to calculate the unemployment rate in the United States from 1950 to 2010.

• Pensions and Unemployment Insurance

  • In the United States, employers play a key role in helping workers save for retirement.
  • Many employers -- especially small employers -- stopped offering traditional "defined benefit" plans, which provide guaranteed monthly payments to retirees based on years of service and salary.
  • Instead, employers increasingly offer "defined contribution" plans.
  • But the most important pension system run by the government is the Social Security program, which provides full benefits to working people who retire and apply for benefits at age 65 or older, or reduced benefits to those retiring and applying for benefits between the ages of 62 and 65.
  • The federal government also assesses an unemployment insurance tax of its own on employers.