Simple question on which your opinion is sought. The government will have a choice this winter between two macroeconomic policies it can pursue. It can’t do both. Which would you prefer? Should it go for:
— Richard Murphy (@RichardJMurphy) August 8, 2020
The question being when did the UK ever have full employment?
Back in January or thereabouts the employment to population ratio was the highest it has been since we started recording it. The unemployment rate was 3.9 % or summat, about what near all economists regard as the frictional rate – it takes time to be interviewed, hired, onboarded etc, meaning that there’s going to be some unemployment rate of people moving between jobs.
At which point Murphy told us there was still an awful lot of unemployment because not everyone had work that provided a decent income and living.
OK, his definition.
And the last time we had unemployment lower than that 3.9% was back in the 1960s/70s, when everyone was considerably poorer than they are now. Meaning that they didn’t have work that provided a decent income and living.
So it’s difficult to see that the UK – by he definitions being used of course – has ever had full employment. What makes Richard Murphy think that this time will be different? Other than, of course, that this is his idea?