When I took Economics 101, back in 1964, the prof said that economists considered 3% to be "full employment". This is because there is always a certain portion of the population in a state of flux, transitioning between jobs.
In this day and age, with all the changes that have taken place since 1964, what would full employment look like today? We have to consider that the population is much more mobile than 50 years ago. It is much more normal today to change jobs, even change careers, change places of residence, and not work for the same company one's whole life, compared to 50 years ago. I say this would mean that the 3% then would be equivalent to about 5% today, at least.
Then there is the fact that the work place consists of a much greater portion of the adult population than 50 years ago. Most women did not have outside jobs then, but they do now. Many old people work instead of completely retiring. This would add at least another percent to the figure.
My conclusion, then, is that full employment would mean an unemployment rate in the neighborhood of 6-7%. Why this is significant is that we see graphs of unemployment comparing recent rates to years ago. This is as bogus as charts which compare financial figures from different eras in terms of actual dollars, instead of using real (inflation-adjusted) dollars.
What this means is that the current unemployment rate of 7.0% is basically full employment, and is not likely to fall any further. Politicians should stop dwelling on this like it is some sort of national crisis, and deal with the real crises, which, unfortunately, are numerous.
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