New jobs numbers show the national unemployment rate is holding steady at 6.7 percent.
The hope is that the number will continue to fall. Borrowing a line from Ludacris, the question for the unemployment rate is: “How low can you go?”
The unemployment rate can’t get to zero. It’s impossible. There will always be people entering the workforce, or between jobs. But just how low the unemployment rate can go is really tough to answer.
“To me, a fair definition of full employment in the United States today would be unemployment under 4 percent,” said Robert Pollin, an economics professor at the University of Massachusetts-Amherst.
Economists disagree about the unemployment rate that will signal the U.S. has achieved to full employment. Some say it’s 5.5 percent, others say it could get down to 2 percent.
There’s more agreement on what a world of full employment feels like. “People who want a job are ready and willing to work. They will find a job,” said L. Randall Wray, an economics professor at the University of Missouri-Kansas City.
It would be an economy where you can feel good about the chances of getting that next job. Your children will be able to get work when they leave school. You’ll be able to plan for the future a little better—maybe buy a house.
“You don’t have to take the worst jobs that come along, just out of fear that you can’t find something better,” Wray said.
In an economy of full-employment, you, the worker, have more control. There are fewer people out there looking to replace you. “When you are at full employment,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, “you are in a situation where employers actually need to bid wages up to get and to keep the workers they need, even for low wage workers.”
At full employment, Bernstein said, we’d likely all get paid more. At the bottom, the middle, and the top of the pay scale.