While there is some consensus around the merits of pursuing full employment, there is no widely agreed definition of what constitutes ‘full’. Nor have we heard much on quite how any given target might be achieved. In this briefing– which marks the launch of a major piece of research on the topic which will conclude before the end of the year – we set out some early thoughts on the ‘what’ and ‘how’ of full employment.
- With reference to a number of potential definitions we suggest, as a preliminary calculation, that there are upwards of 0.5 million unemployed who can be absorbed into work (‘near-slack’) along with somewhere in the region of one million who can be brought into the labour market (‘the missing workforce’) in our more deprived regions. Once we account for further economic expansion and population growth, this number more than matches the Chancellor’s ambition of two million by the end of the parliament.
- Adopting an even more stretching target, which would make the UK a world leader on employment if realised, would require adding considerably more people to the workforce.
- We note that any given aggregate target can perhaps best be pursued by identifying those groups that have the most room for employment expansion – including the young, those approaching retirement, single parents, black and minority ethnic individuals and those with ill health or a disability – and focusing policy intervention appropriately. Alongside a macroeconomic policy environment that helps to drive demand, we believe that it is important to build on the lessons of the successful policy intervention that has occurred in relation to employment among women in recent decades.
- In doing so, government can help boost the living standards of the individuals targeted for support and spread significant gains to society as whole.