Above Full-Employment Equilibrium

Question: Wouldn’t full employment mean that everyone is employed? Wouldn't that be full employment? Well…no. It’s a government statistic, so full…isn’t really full. Its full-ish. And full is probably impossible anyway, because there will always be college students, part-time Uber drivers, derelicts and, well…actors.  

So when economists talk about full employment, they mean that everyone who is actively seeking work is generally finding work...but it recognizes that a lot of people have either given up the hunt and are happy living on the equivalent of replacement value of 48 grand-a-year of welfare, or they’re, ya know…off the grid. The equilibrium notion is the hard part to conceive of here. When "almost every single living being" is employed, it likely means that the economy is on fire (in the good way). Tons of demand for...stuff. Tons of shortages of labor and supplies. And it also probably means that we have roaring inflation. Which is…bad. There is a balance of employed and unemployed, which makes for a stable set of parameters that keep the people employed who want to be employed. And it keeps inflation at small numbers, such that old people who generally retire on bonds aren’t forced to live inhuman lives in their station wagons parked on the side of the road, because roaring inflation at 6% has made their 2%-a-year bond investment returns destroy most of the buying power of their life savings. 

Historically, economists have generally targeted 95% as the full employment equilibrium number. Or 5% unemployment. In other words, at that level, there is low, or just very modest inflation. And the employment-seeking masses have generally found what they’ve been looking for. Like Bono. Turns out he was just looking for his car keys. Go figure.