The Challenge of Full Employment
THROUGHOUT history elections have been won and lost based on the state of the economy, and opinion polls regularly suggest a high level of public interest in the nation's economic affairs. Currently, anxiety about inflation tops the list of citizens' concerns, but any serious decline in output and employment could put unemployment back in first place.
This anxiety stems not only from the real hardship that inflation and unemployment produce, but also from the insecurity they breed and from doubts about our ability to cope with them. These doubts are especially pervasive among professional economists, including those who advise our national leaders.
In spite of such uncertainties, we now have legislation that commits us to act. The Full Employment and Balanced Growth Act of 1978 (more commonly known as "Humphrey-Hawkins" and hereafter referred to as the Full Employment Act) establishes specific goals for unemployment and inflation, complete with deadlines for achieving them.
In this chapter, we address some of the issues raised by this legislation and by the broader challenge it symbolizes, giving particular attention to the