Friday, February 07, 2020

Full employment

The history of the meaning of "full employment," including references to Keynes and Beveridge, may be found in
the Bloomberg article Even the Fed Struggles to Nail Down the Meaning of ‘Full Employment’

Full employment does not mean everyone who wants a job commensurate with one's skills gets such a job. Rather, the condition of "full employment" means everyone willing to work at the going wage rate is able to get a job. Thus, a scientist, working on a 10th postdoc and unable to get a permanent position, but who is able, in principle, to get a job at the going wage rate, is "employed" and counting toward the condition of "full employment." Unless, of course, such person just says no.

Of interest in the Bloomberg article:

Since 2015 the biggest factor in measuring employment gains among individuals aged 25 to 54 has been not those counted as unemployed or as discouraged, but those who say they aren’t looking for work. While that number has been coming down rapidly, the proportion of prime-working age individuals who aren’t working because they say they don’t want a job still stands at 15.9%. That’s well above the 1995-2007 average of 14.7%

And, in terms of the matter of high employment/not so high wage growth, the Bloomberg article notes:

there’s evidence that inflationary risk from the low unemployment rate may be in fact diminishing. Wage growth—which arrived late in the economic expansion and hasn’t exactly been gangbusters—is showing signs of flagging. Average hourly earnings advanced 2.9% in 2019, according to the Labor Department, well below the 3.3% pace in 2018.

At his regular press conference following the FOMC’s most recent policy meeting on Dec. 11, Powell conceded that the data weren’t consistent with the hallmarks of a fully-employed economy. “I’d like to say the labor market is strong. I don’t really want to say that it’s tight,” he told reporters.

See also

Too many lawyers with technical degrees, or too many underemployed scientists?

Startup Act 2.0: are you turning up your nose at $150K/year jobs?

Chasing purple squirrels

IAM on IBM's Kappos, not touching the political or patent pulse?
, including the text

On the layoffs themselves, from the Times Herald-Record online:

IBM fired some 5,000 U.S. workers Thursday [26 March 09] — including employees at IBM Sterling Forest in Tuxedo and IBM Poughkeepsie.

One by one, thousands of IBM workers entered managers' offices with a sense of dread to learn if they'd get the ax.

At Sterling Forest, which had been spared from a wave of firings earlier this year, an employee described the mood as grim and the building whisper quiet.

Big Blue is shifting work to India, where labor and production costs are significantly lower.
Of the piece on the economy (including mention of IBM's Rick Clark), note an irony in that IBM just had a patent application on outsourcing [20090083107, titled METHOD AND SYSTEM FOR STRATEGIC GLOBAL RESOURCE SOURCING ], which IBM now plans to withdraw.


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