"Chasing Full Employment"
by Louis Uchitelle

Source: The New York Times, Sunday, February 12, 2006.
http://select.nytimes.com/search/restricted/article?res=F50913FB3E5A0C718DDDAB0894DE404482

             "Full employment" is defined as having a job available for every adult who is ready and willing to work. It sounds like a great idea. In a private, market economy, however, the number of jobs and the number of available workers may not be in sync in the short run. One of the key issues debated among economists is whether and how government should ensure that there are plenty of jobs available. As noted by economics reporter Louis Uchitelle in the article "Chasing Full Employment," attitudes toward public sector job creation have changed radically in the past few decades. Many economists and policy makers—including President Franklin D. Roosevelt—considered the government as an "employer of last resort." These days, economists and policy makers tend to worry that too many jobs will cause employers to raise wages in order to attract workers.  This, in turn, will force businesses to raise prices to pay the higher wages.  Unemployment, though painful, can be a way of keeping prices from rising too fast. 

             But some economists have returned to the idea that full employment is a worthy goal.  Global competition, it is argued, keeps prices from rising fast.  In the 1990s, for example, both the unemployment and inflation rates were low.  Full employment does not have to mean higher prices.

             We will be examining these issues in more detail in chapters 9 through 15.  Keep the issues raised in this article in mind when we turn our attention to the three macroeconomic goals of economic growth, low unemployment, and price stability. 

• Do you think that every adult who wants work has a right to a job?
• If you answered "yes" to this question, should government provide those jobs when private employers do not have enough jobs available?  According to the article, would these have to be "make-work" jobs (that is, unproductive work just to give someone a paycheck)?
• Nobel Prize-winner Amartya Sen is quoted in the article as suggesting that employment is a civil right. What are some of the benefits of having work, in Sen's opinion?