What is Full Employment?

Malcolm Tatum
Malcolm Tatum

Full employment is a situation in which all or almost all of the citizens of a community who are able and willing to work are able to do so, within the prevailing wages and the working conditions found within that community. While generally considered more of a theoretical state than an actual set of circumstances, the concept of full employment is often associated with Say’s Law. This law essentially states that the production of all goods and services is directly tied to the pursuit of other goods and services, thus creating an ongoing and balanced medium of exchange. When everyone is involved in the creation of these products as a means of earning resources to acquire other goods and services, full or complete employment is the result.

Full employment opportunities may be listed in a newspaper's classified section.
Full employment opportunities may be listed in a newspaper's classified section.

Over the years, other definitions for full employment have also been presented. One approach is to consider any situation where the number of people looking for work is not exceed by the number of open positions available. In theory, each one of these work seekers could be matched with a job, thus creating a balance between available work and the available work force. Other concepts of full employment allow for the existence of a small number of people who are temporarily seeking employment, and are anticipated to find work within a relatively short period of time.

Many people work seasonal or temporary jobs while seeking out full employment.
Many people work seasonal or temporary jobs while seeking out full employment.

Different economists hold various theories about full employment. Many agree with the idea that some small amount of unemployment is necessary in order to control the rate of inflation and deflation within an economy. Others tend to think that a situation in which no unemployment exists creates a lack of true competition among employers for job applicants, causing no need to offer competitive wages and benefits based on merit. As a result, there is little room for advancement, and no real incentive to offer raises or other benefits to employees. While full employment may create conditions in which there is a great deal of job guarantee or security, it can also lead to a situation where wage slavery exists, thus limiting the options for employees to better their circumstances.

Full employment may be considered as an assessment of the relationship between employment and unemployment as it relates to the work force of a nation, state, or local community. The assessment may also focus on employment situations within a given industry, or even within a subset of that industry. There is a great deal of debate as to whether there has ever been a true occurrence of full employment at any time in history. Since different concepts of what constitutes full employment continue to exist, there is not likely to be an end to this debate in the near future.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Discussion Comments


@SauteePan - I think that a full employment policy would really help us reduce the high employment rate. When more people are working, they have a higher ability to purchase products that will help the economy grow and provide more opportunities for all. We just have to figure out how to get there.


I understand that full employment might give little incentive for companies to raise wages, but so does a very high unemployment rate. I think that this is worse for job seekers because it would essentially be an employer’s market and they would be able to offer lower wages than normal because there are some many more job seekers vying for a position within the company.

This increased competition for jobs depresses the potential salary and I actually think that when there is full employment a company that would like to hire someone has to offer more incentives and a higher salary in order to lure someone from the company that they are working for since the full employment definition mentions that just about everyone is working.

I think that someone that does not have a job is more likely to consider a lower wage than someone that is already employed. I believe that the unemployment rate favors companies that are looking to hire more employees.

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