Full employment implies the non-existence, at least theoretically, of unemployment.
Full employment is a notion that was developed in the field of economics to refer to the situation in which all people who are of working age and who want to work have a job.
It should be noted that full is an adjective that can be used to name something that is complete or full . Employment , on the other hand, is a term that is used in reference to work or a trade .
Full employment implies, in theory, that there is no unemployment and that the labor supply is sufficient to satisfy demand . On a real level, however, there is no unemployment rate that is equal to zero . That is why it is considered that there is full employment in those economies with very low levels of unemployment . Specifically, it is established that we can speak of full employment when the unemployment rate does not exceed 3% of the so-called active population.
On the other hand, unemployment can appear momentarily when an individual does not accept a specific job because he or she is not satisfied with the conditions or when an individual leaves one job to move to another (and has not yet integrated into his or her new position).
Full employment throughout history
Throughout history there have been many situations that have made full employment truly impossible to achieve. Specifically, among the most significant are the crisis of 1929 or any of the wars carried out. All this without forgetting very recent events, which are still being experienced in some countries, such as the economic crises.
In 2015 , for example, among the nations that were very close to experiencing full employment was the United Kingdom , as it had an unemployment rate of only 4.2% according to data released in April of that year. . However, despite this really positive figure, it must be taken into account that a significant number of jobs that were created were identified as being very precarious.
When there is full employment, the number of unemployed is very low.
Keynesians vs. liberals
The goal of achieving full employment is essential to Keynesian policies (based on the thought of John Maynard Keynes ). According to this position, only full employment guarantees balance in the economy, allows resources to be used efficiently and keeps the chance of a crisis at bay. Therefore, for Keynesianism, the State must act in the market to promote full employment.
Liberal policies , on the other hand, maintain that full employment has to be achieved naturally, from the game between the supply and demand of labor . Unemployment, therefore, is useful to reduce the value of the salary and encourage the creation of new positions (cheaper for companies).
Full employment and guaranteed work
We must not overlook the existence of what has been called guaranteed work (TG) . This is a term that is used to define a political-economic proposal that is presented as a clear solution to unemployment.
Specifically, what it is committed to is achieving full employment and also price stability. And this is where the State plays a fundamental role, since it exercises the role of what has become known as the employer of last resort .