Answer:
Full employment is a concept in economics that refers to a situation where nearly all individuals who are willing and able to work at the prevailing wage rates are employed. However, it does not mean 100 percent employment of the labor force, and there are several reasons for this:
Frictional Unemployment: Frictional unemployment is the temporary unemployment that occurs when individuals are between jobs or are searching for their first job. Some level of frictional unemployment is natural as people transition between jobs or enter the workforce for the first time. Even in a fully employed economy, there will always be some individuals in this state.
Structural Unemployment: Structural unemployment occurs when there is a mismatch between the skills and qualifications of workers and the job vacancies available in the labor market. This mismatch can result from changes in technology, shifts in the demand for certain skills, or geographical disparities in job opportunities. Structural unemployment may persist even in a fully employed economy because retraining and reallocation of workers take time.
Seasonal Unemployment: Seasonal unemployment is tied to specific seasons or periods of the year when certain industries or jobs are less active. For example, agricultural workers may be unemployed during the off-season or ski resort employees during the summer. This type of unemployment is expected and does not indicate a lack of full employment over the course of the year.
Cyclical Unemployment: Cyclical unemployment is related to fluctuations in the business cycle. It occurs during economic downturns or recessions when demand for goods and services decreases, leading to layoffs and reduced hiring. Full employment aims to achieve a low level of cyclical unemployment but does not eliminate it entirely.
Voluntary Unemployment: Some individuals may choose to be voluntarily unemployed for various reasons, such as pursuing higher education, taking care of family members, or simply not wanting to work at the prevailing wage. These choices are personal and are not indicative of an economy's inability to provide employment opportunities.
In summary, full employment is an economic goal that seeks to minimize involuntary unemployment, where individuals who are willing and able to work cannot find jobs. However, it acknowledges that there will always be some level of frictional, structural, seasonal, and cyclical unemployment, and it does not imply 100 percent employment of the labor force at all times.
Step-by-step explanation: