Are we at full employment yet?

The good news jobs report last week issued by the Bureau of Labor Statistics showed the U.S. economy generated 211,000 new jobs in April, and the unemployment rate was at 4.4 percent. We haven't had an unemployment rate that low since April 2001, just 4 months into the administration of George W. Bush.

Construction supervisor with apprentices, Portland Oregon 2013

Jacob McKay, Hoffman Construction, with apprentices, Portland, Oregon 2013. 5,000 new construction jobs added to U.S, economy April 2017

But at that time we were headed for a recession with unemployment rates reaching as high as 6.3 percent in July of 2003. And what's more, that 4.4 percent unemployment rate was an uptick from the still lower unemployment rates in the last two years under Bill Clinton when they hovered near, at or under 4 percent. The unemployment rate in April 2000 was a low 3.8 percent. And even more incredible, the four months, September through December of 2000, the unemployment rate stood at 3.9 percent in each of those months.

Now that was full employment.

U.S. unemployment rate, monthly 1990-April 2017

So are we at full employment now. I don't think so, even though many economists would consider and have considered an unemployment rate of 4.5 percent as full employment.

Don't get me wrong. A 4.4 percent unemployment rate is good. And that the unemployment rate has come down from the highs of the great recession is very good. But average weekly wages are hardly moving. Under Bill Clinton's two terms as president, average weekly earnings grew 21 percent. When unemployment rates were at 10 percent in October 2009, I would have settled for an unemployment rate of 4.4 percent and would have been inclined to say that a 4.4 percent unemployment rate was full employment.

But this doesn't feel like really full employment. The biggest reason is that wages are not moving up much at all. But another reason is that too many potential workers are not in the labor force. This is shown by the relatively low percentage of the adult civilian population who are taking part in the work force. Over the last year that percentage has been hovering around 63 percent. In January 2001 that number stood at 67 percent. What I want to see in order to call this economy a full employment economy is for that number to rise.

Another number that calls into question whether we are finally at full employment is the percentage of the adult civilian population that have jobs. Over the last several months that number has hovered around 60 percent. In the year 2000 that number was almost 65 percent. Some of that decline may have come from an aging population, hence more retirements. But let's look at the percentage of the 25-54 year old population with a job. That will remove the aging effect. The percentage of the 25-54 year old population with a job was 81-82 percent in 2000-2001, now it is around 73 percent.

Before I call this a full employment economy, I want to see wages rise and I want to see potential workers pulled back into the labor market by those rising wages. And I want to see employers being active in recruiting workers and offering jobs to workers who may need some learning and training to fill those jobs and for employers to offer that training. I want to see workers who recently had no chance of finding a job because of minor handicaps or because of minor past infractions in their records be able to land a job. And I want to see workers being able to quit jobs and quickly find another job at better wages.

That was the way it was in April 1998 through January 2001. The good old days.

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