Full employment

full-employmentemploymentEmployment for allmain workersmaximum employmentminimal unemploymentnear-full employmentsecurity of employmenttotal employment
Full employment means that everyone who wants a job can have work hours they need on "fair wages".wikipedia
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Unemployment

unemployedunemployment ratejob creation
Because people switch jobs, full employment means a stable rate of unemployment around 1 to 2 per cent of the total workforce, but does not allow for underemployment where part-time workers cannot find hours they need for a decent living. In macroeconomics, full employment is sometimes defined as the level of employment at which there is no cyclical or deficient-demand unemployment.
A third group of theories emphasize the need for a stable supply of capital and investment to maintain full employment.

John Maynard Keynes

KeynesKeynesianKeynes, John Maynard
Some see John Maynard Keynes as attacking the existence of rates of unemployment substantially above 0%:
The General Theory challenged the earlier neoclassical economic paradigm, which had held that provided it was unfettered by government interference, the market would naturally establish full employment equilibrium.

Underemployment

underemployedbetter paying jobsdisguised
Because people switch jobs, full employment means a stable rate of unemployment around 1 to 2 per cent of the total workforce, but does not allow for underemployment where part-time workers cannot find hours they need for a decent living.
Relatedly, in macroeconomics, "underemployment" simply refers to excess unemployment, i.e., high unemployment relative to full employment or the natural rate of unemployment, also called the NAIRU.

Robert W. Clower

ClowerClower constraintClower, Robert W.
Low demand for products (below potential output) implies that there is a sales constraint on the labor market to the left of equilibrium so that the quantity of labor demanded is below the amount that would be demanded if the aggregate demand for products was sufficient (what Robert Clower called the notional demand for labor).
Keynesian theory as disequilibrium analysis in contrast to standard general equilibrium theory, thereby generalizing (or rejecting) Walras' law and standard price theory. To this end, he proposed the 'dual-decision hypothesis' in which realized transaction quantities affect adjustments in output at other than full-employment equilibrium but not at full-employment equilibrium. This, he argued, was implicit in Keynes's work to explain how full-employment equilibrium is only a special case. Such quantity constraints introduce nonlinearities that complicate dynamic stability of the economic system as to full-employment equilibrium and require a distinction between notional and effective demand.

William Beveridge

BeveridgeSir William BeveridgeLord Beveridge
William Beveridge defined "full employment" as where the number of unemployed workers equaled the number of job vacancies available (while preferring that the economy be kept above that full employment level in order to allow maximum economic production).
Beveridge saw full employment (defined as unemployment of no more than 3%) as the pivot of the social welfare programme he expressed in the 1942 report.

Job guarantee

jobs guaranteeemployer-of-last-resortguarantee employment
Some, particularly Post-Keynesian economists have suggested ensuring full employment via a job guarantee program, where those who are unable to find work in the private sector are employed by the government, the stock of thus employed public sector workers fulfilling the same function as the unemployed do in controlling inflation, without the human costs of unemployment.
Its aim is to create full employment and price stability, by having the state promise to hire unemployed workers as an employer of last resort (ELR).

Humphrey–Hawkins Full Employment Act

Full Employment and Balanced GrowthHumphrey-Hawkins ReportU.S. Humphrey-Hawkins Act of 1978
The relevant legislation is the Employment Act (1946), initially the "Full Employment Act," later amended in the Full Employment and Balanced Growth Act (1978).
The Act also encouraged the government to develop a sound monetary policy, to minimize inflation, and to push toward full employment by managing the amount and liquidity of currency in circulation.

Depression of 1920–21

depressionrecessiondepression of 1920-21
The 1946 act was passed in the aftermath of World War II, when it was feared that demobilization would result in a depression, as it had following World War I in the Depression of 1920–21, while the 1978 act was passed following the 1973–75 recession and in the midst of continuing high inflation.
Both agree that unemployment quickly fell after the recession, and by 1923 had returned to a level consistent with full employment.

Employment Act of 1946

Full Employment ActEmployment actFull Employment Act of 1946
The relevant legislation is the Employment Act (1946), initially the "Full Employment Act," later amended in the Full Employment and Balanced Growth Act (1978).
The theory, set forth by economist John Maynard Keynes and his American disciples such as Alvin Hansen at Harvard, contends that unemployment is caused by insufficient aggregate demand relative to the possible aggregate supply generated by full employment.

Abba P. Lerner

Abba LernerLerner
Though their theory had been proposed by the Keynesian economist Abba Lerner several years before, it was the work of Milton Friedman, leader of the monetarist school of economics, and Edmund Phelps that ended the popularity of this concept of full employment.
Based on effective demand principle and chartalism, Lerner developed functional finance, a theory of purposeful financing (and funding) to meet explicit goals, including full employment, no taxation designed solely to fund expenditure or finance investment and low inflation.

Post-Keynesian economics

post-KeynesianPost-Keynesian economistsPost-Keynesians
Some, particularly Post-Keynesian economists have suggested ensuring full employment via a job guarantee program, where those who are unable to find work in the private sector are employed by the government, the stock of thus employed public sector workers fulfilling the same function as the unemployed do in controlling inflation, without the human costs of unemployment.
The theoretical foundation of post-Keynesian economics is the principle of effective demand, that demand matters in the long as well as the short run, so that a competitive market economy has no natural or automatic tendency towards full employment.

NAIBER

NAIBER (non-accelerating inflation buffer employment ratio)
NAIBER
The concept of NAIBER is related to the idea of a Job Guarantee aimed to create full employment and price stability, by having the state promise to hire unemployed workers as an employer of last resort (ELR).

Chapter IX of the United Nations Charter

Chapters IXChapter IX: International Economic and Social Co-operation
Chapter IX of the United Nations Charter
a. higher standards of living, full employment, and conditions of economic and social progress and development;

Say's law

law of marketssupply creates its own demand
Say's law
According to Keynes, the implication of Say's law is that a free-market economy is always at what Keynesian economists call full employment (see also Walras' law).

Job sharing

job sharejob sharedjob-share
Job sharing
Full employment

Reserve army of labour

reserve army of laborindustrial reserve armyreserve army of the unemployed
Reserve army of labour
Full employment

Macroeconomics

macroeconomicmacroeconomistmacroeconomic policy
In macroeconomics, full employment is sometimes defined as the level of employment at which there is no cyclical or deficient-demand unemployment.

Inflation

inflation rateprice inflationfood inflation
Some economists reject that full employment and see inflation as being a likely consequence of its enforcement, i.e. to prevent inflation from accelerating.

NAIRU

non-accelerating inflation rate of unemploymentfull employmentNAIRU (non-accelerating inflation rate of unemployment)
This view is based on a theory centered on the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU), and those who hold it usually mean NAIRU when speaking of full employment.

Milton Friedman

FriedmanFriedman, MiltonMilton
Though their theory had been proposed by the Keynesian economist Abba Lerner several years before, it was the work of Milton Friedman, leader of the monetarist school of economics, and Edmund Phelps that ended the popularity of this concept of full employment. The NAIRU has also been described by Milton Friedman, among others, as the "natural" rate of unemployment.

William Dickens

For the United States, economist William T. Dickens found that full-employment unemployment rate varied a lot over time but equaled about 5.5 percent of the civilian labor force during the 2000s.

OECD

Organisation for Economic Co-operation and DevelopmentOrganisation for Economic Co-operation and Development (OECD)Organization for Economic Cooperation and Development
For example, in 1999, in the United States, the Organisation for Economic Co-operation and Development (OECD) gives an estimate of the "full-employment unemployment rate" of 4 to 6.4%.

Standard error

SEstandard errorsstandard error of the mean
This is the estimated unemployment rate at full employment, plus & minus the standard error of the estimate.

Potential output

potential GDPactual GDPoutput
The concept of full employment of labor corresponds to the concept of potential output or potential real GDP and the long run aggregate supply (LRAS) curve.