Goal+-+Full+Employment

If you asked the average person what full employment means, a probable answer would be something to the effect of “full employment is when no one is unemployed”. In terms of economics **Full Employment** is when everyone who wants a job or who is willing to work is employed.
 * Macroeconomic Goal of Full Employment**

Currently the unemployment rate in Canada is 7.6%. The province with the lowest unemployment rate is Manitoba at 5.1%. The province with the highest unemployment rate is Newfoundland and Labrador at 13.8%. According to the OECD (Organization for Economic Cooperation and Development), a country is considered to be fully employed if the unemployment rate is between 4 and 6.4%. It is impossible for a country to have 0% unemployment; included in the unemployment rate is a group of people who are considered to be frictionally unemployed. **Frictional Unemployment** is when people are in between jobs. Frictionally unemployed people would include those that have recently finished post secondary or other training and are now looking for employment. This group would also include those taking a break between jobs or those who are taking time to do a thorough job search.

Another group of unemployed people included in the unemployment rate are those who are structurally unemployed. **Structural Unemployment** is if you are unemployed because of changes in demand patterns for your type of work. For example your work has ceased and you decide to retrain for a different type of job; you are currently unemployed but are working towards new employment. Currently the health care field is seeing a lot of people retraining and entering that field.

To lower unemployment rates often a government intervention is required. If the government begins to spend money in order to create jobs, the increased number of employed people will spend more money, in turn stimulating the economy which will lower the unemployment rate. Initially you would think that lower unemployment would be a good thing but, as unemployment lowers then competition increases for employees. In turn businesses have to pay higher wages for those employees, which increases the cost of goods and services which increases price which causes an increase in inflation. Inflation is inversely related to unemployment. In a period of higher unemployment inflation will be lower (or even experiencing deflation), compared to a period of lower unemployment where inflation begins to rise. This relationship between unemployment and inflation is called the **Phillips Curve**. Canada’s current policy is to keep the inflation rate between 1 & 3%.

** Information in this document is referenced from: ** Class notes and lectures by Dr. Stephanie Powers January 2011. John Sayre and Alan Morris, //Principles for Macroeconomics//, McGraw-Hill Ryerson, 2009, p 24-25 []