The U.S. unemployment rate of 4.9 percent in January 2016—a level not seen in nearly eight years—has spawned a discussion in the media and among economists on whether we are getting closer to “full employment.”
Loosely defined, full employment is an economic condition when all eligible people can find work at prevailing wages, and a time when the number of job seekers nearly matches the number of job openings. It does not assume 0 percent unemployment; historically, the jobless rate for this condition typically ranges from 4 to 6 percent.
But these are not typical times for the U.S. labor market, which is still recovering from the Great Recession and marked by technological advancements that continue to eliminate or alter the nature of millions of jobs.
So is the notion of full employment no longer within reach? What follows are the views of several HR professionals, recruiters and economists on this topic.
Bob Corlett, president, Olney, Md.-based recruiting firm Staffing Advisors
“It’s not that full employment is suddenly an obsolete concept; it was never useful to anyone but economists in the first place. The big macro numbers don’t tell you anything, and unemployment rates vary widely by where you live. The job market is rarely in balance. Economists don’t mind this. People do.
“Hiring is hard until enough people get trained in a particular skill. It all depends how fast people migrate from other job sectors into the sector with the shortage. If experts can easily jump from one industry to another, that skill almost never gets in short supply—HR is a classic example of this. HR professionals can usually transition from the for-profit sector into the nonprofit sector and back. And while this might help keep people working, it means that the vast majority of HR professionals are always forced to compete for jobs against large numbers of their peers.”