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Full employment
The idea of full employment re-surfaced during the run up to the last election, but failed to be more that a fleeting media episode as the main political parties attempted to embellish their political credentials.

The Liberal Party certainly hasn't rejected the idea of full, meaningful employment, paying a living wage, and it should not be dismissed as some sort of unachievable utopian idea.

Full employment would imply full employment for the UK workforce and population. This in itself entails a ethical conundrum as to the ethics of displacing those in employment who are of foreign origins.

A full employment policy would need to enable the long-term unemployed and those on benefits to be matched to employment opportunities thus potentially displacing foreign workers.

The reality is that despite record levels of employment and work force participation, far too many people remain parked on benefits, unable to take up meaningful employment, necessitating immigration to plug the gap.

The first obstacle is the concept of structural unemployment, the persevered equilibrium level of unemployed. This represents the hardest to place and employ, due to their to their lack of skills or location, or lack of mobility.

Structural unemployment was once thought to be about 4.25% of the workforce in the UK but in recent years appears to have drifted up to 5.5%. That equates to about 1.75 million perpetually unemployed, and  an increase of 450000 on previous perceptions.

Put another way, economists and government ministers feel a 5.5% unemployment rate is manageable, even desirable, to balance inflation.

When economies are growing, and creating jobs, they encounter wage push inflation, where shortages of labour, and by implication skilled labour, begin to force up wages as employers are forced to pay more for peoples skills. This happens in tandem with inflationary pressures from other scare resources, most obviously raw materials.

As has been said elsewhere no economic cycle ever died of old age, they were all killed by central banks increasing interest rates to curb inflation and an overheating economy.

As I have previously argued a better educated, more mobile work force may be able to hold down wage push inflation, certainly not indefinatly, extending the period of economic activity before policy makers reach for the brakes.

The path to full employment involves the creation of an attractive investment environment, with the right balance of tax and regulatory environments, and a skilled, mobile workforce to attract long-term investment in the country.
It requires affordable housing for essential workers, good transport links and accessible public transport.

For all the official league tables placing the UK in 6th place for educational achievement, employers continue to bemoan the lack of literacy and work related skills in the employment market. Apprenticeships and vocational training need to be empathised and supported.

Full employment has unquantified benefits. A higher domestic rate of work force participation reduces the need to employ foreign workers, reducing immigration, and the persevered pressure's on housing and schools.

People in work, on a living wage are in less need for working tax credits, heating allowance and housing benefits. They are likely to be less stressed and have better self respect and self esteem, reducing both physical and mental heath issues.

There will always be those who are on invalidity benefits because of ill health, and these people have the right to an adequate level of support in our society. However nobody should be told that the door to meaningful employment has been closed and they can stay at home on a drip-feed of benefits because its easier to find somebody else to take up that employment opportunity.

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