JOBS: The Elusive Objective of Full Employment

One of the anomalies of 1975 was the curious public quiescence about the highest unemployment rates that the nation has seen in the era since World War II. The rate hit 9.2% last May, and has since inched down to 8.3%. Members of TIME'S Board of Economists unanimously predict, in line with most other forecasters, that it will still be above 7% at the end of 1976—meaning that it will be as high after a year-and-a-half of recovery as it has been at the bottom of some previous recessions.

Yet there were no job riots, no encampments of the unemployed in Washington, few loud calls for radical economic and social change. As the election year of 1976 opens, the AFL-CIO is calling for a damn-the-consequences drive to slash the jobless rate as rapidly as possible. It urges the Government to expand the money supply at whatever rate may be necessary, adopt whatever tax-and-spending policies seem called for, and even start direct public-hiring programs (the union federation does not say for what kind of jobs) to get the jobless rate down to 3% and keep it there. By much the same measures, a bill introduced almost a year ago by perennial Presidential Hopeful Hubert Humphrey and Democratic Congressman Augustus Hawkins of California calls for a 3% rate within 18 months —but that bill has not advanced even to the stage of committee hearings. In fact, the latest opinion polls show that unemployment ranks a poor second to inflation as a public economic worry.

Why this strange quiet in a nation supposedly committed by law (the Employment Act of 1946) to strive always for "maximum employment"?

Part of the answer undoubtedly is that the public, in the words of Economist Otto Eckstein, is still "shell-shocked" by the severity of the recession that ended last spring. People seem to recognize, accurately, that years will be required to repair the damage to the jolted economy. In addition, the consciences of people who are working have been assuaged by the knowledge that the U.S.

does a far better job of taking care of its unemployed than it used to. Jobless benefits paid out during 1975 totaled about $20 billion; an unemployed worker with dependents can now collect up to $156 a week tax free for as long as 65 weeks, though the average payment is $71 a week.

But much of the public quiet probably reflects a puzzled awareness that the economy and the labor force are changing in such a way as to make the goal of "full employment" difficult even to define, let alone reach. Traditionally, a 4% jobless rate has been accepted as practical "full employment." That definition is now 20 years old; it is based on the fact that unemployment averaged 4.1% during 1956, a year in which the economy seemed to be showing balanced growth, at about its best long-range potential, with little inflation.