Full Employment In The United States

Just because the economy is at full employment, this does not necessarily mean that the unemployment rate is at zero percent. Full employment is when there is no cyclical unemployment in the economy. The economy is generally at full employment during times of expansion, where cyclical unemployment decreases (McEachern). Full employment does not mean zero employment, but rather low employment – usually around 4 to 6 percent according to economists. However, this won’t result in a zero unemployment rate because there are still other forms of unemployment in effect (like frictional, seasonal, and structural). In addition to this, there are also those who are in the labor force that want a job but can’t find one, which are also considered unemployed.

economy, there are still nearly 9 million people without jobs who want them. The Fed is projecting to see full employment at an unemployment rate of 5.2% (Stern). We are still not at the pre-recession levels, but the country is certainly very close. With GDP and the economy continuing to grow each year, jobs are becoming more accessible and available for Americans. Lastly, Goldman believes that those without jobs will be facing either frictional unemployment or structural unemployment (Stern). Basically, this means a majority of people who want work will be employed, or in the transition between jobs. If a more generous unemployment insurance system was implemented, then you could assume this would skew the full employment figure. Because better unemployment benefits are being offered, people are more likely to not search for a job as hard as they were before. The sense of urgency to find a job will be lower, so people may take their time finding work, or not bother at all due to a more generous system. In turn, this would increase the unemployment level since more people are in the labor force but cannot find work. Leaving unemployment insurance systems the way they are will help protect the economy and its

The United States has had period where our unemployment rate has been higher, equal, and lower compared to countries around the world. Over the last two decades, U.S. unemployment has been trending downward, although the recession in 2008 caused a massive spike upward compared to Western Europe (specifically the averages of France, Germany, Italy, and the United Kingdom). Generally speaking though, the U.S. unemployment rate has been declining as new jobs are being created and our economy is booming once again. In Europe, unemployment has remained high and the highest among these economies. Rates in Europe are so high due to the fact that the ratio of unemployment benefits to average pay is higher than what we have in the United States, as well as having unemployment benefits that last for a longer period of time (McEachern). Because benefits last longer, more workers in Europe will be less motivated to find work since they can sit at home and collect unemployment benefits. To make matters worse, Europe has strict government regulations in place that make employers more reluctant to hire new workers, adding to the already high unemployment (McEachern). It is important to note that this information about European rates can actually be misrepresentative because it is an average of four countries. In fact, as of the beginning of 2015, the United Kingdom and Germany have lower rates (5.7% and 4.8%, respectively) compared to France and Italy (10% and 12.7%, respectively),