The Benefits of Full Employment: When Markets Work for People
by Jared Bernstein and Dean Baker, 2003
Economic Policy Institute
ISBN: 1-932066-04-7
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About the Authors
Jared Bernstein is director of the Living Standards Program at the Economic Policy Institute
Dean Baker is co-director of the Center for Economic and Policy Research
Back Cover
For most of us, the meaning of "full employment" is pretty clear -- everyone who wants a job has one. And it seems logical that, in a country that values work so highly, economic policy would be directed toward this objective. But over the last few decades policy makers have explicitly pursued a different employment goal, one that insists upon a certain level of joblessness in order to keep prices stable.
Then came the 1990s boom. The experience of that growth period taught a valuable lesson -- that true full employment and stable prices can go together. Moreover, we learned that the benefits of full employment are far reaching.
When everyone works, wages rise, particularly for the lowest earners; job quality improves; incomes rise; and poverty, the welfare rolls, and crime all fall.
When the 1990s business cycle ended, so did full employment. In a very short time millions lost their jobs, and the unemployment rate shot back up. many economists and policy makers will try and argue that the latter 1990s was an aberration and that we cannot realistically aspire to get back to the tight labor markets that prevailed during that time. Bu the lessons learned leave us with no justification for not pursuing a true full employment policy.
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