Why ‘Maximum Employment’ Feels Impossible In The U.S.

The Federal Reserve has a dual mandate to both promote maximum employment and keep prices stable. Yet, the central bank cannot influence employment directly and it is notoriously hard to measure.

"It's hard to tell Americans we can have too many people working," David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, told CNBC.

Maximum employment is difficult to quantify. However, at the Federal Open Market Committee news conference in January 2022, Federal Reserve Chairman Jerome Powell announced that "labor market conditions are consistent with maximum employment."

Maximum employment is also difficult to quantify because existing measures of employment, such as the unemployment rate or the labor force participation rate, often do not account for certain groups of people.

Watch the video above to learn why the Fed does not always want everyone who wants a job to have one and what that means for inflation.

Chapters:
00:00 — Introduction
01:08 — How the Fed influences jobs
04:22 — Measuring employment
06:49 — Add it up

Produced and Edited by: Andrea Miller
Animation: Josh Kalvin
Supervising Producer: Lindsey Jacobson

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Why ‘Maximum Employment’ Feels Impossible In The U.S.

[Gabster]

Hard to be employed when you are disabled or constantly sick. Oh yeah, you know what else is a joke? When you work two jobs and still can't afford a place to live.

[nothingmatters]

It is outrageous that the powers at be tell people to get a job, but now they don't want everyone to have a job.

[CarlosValenzuela-sxxb]

"Go get a job you lazy loser!"

> Gets a job

"Wait, you aren't supposed to, else we risk inflation. Let me adjust those interest rates."

👍🏻

[BUG]

Call me naive but I think if a country relies on a certain percentage of it's popularion to suffer without income and insurance, with no safety net, there might be something fundamentally wrong with that country.

[GetOffMyy]

So when too many people are finally able to make a living and afford things that’s the signal to raise interest rates? Insane.

[scottgmail]

They need people to suffer so that the rich can live their spoiled life.

[carparthero]

i would love to see CNBC make a video about the ruling class explaining why everyone can't or shouldn't be able to achieve financial comfort. 🤷🏼‍♂

[dawaj]

I pledge allegiance to the flag of the Corporate states of America and to the oligarchs for which it stands, one nation under debt, easily divisible, with liberty and justice for Oil

[yuzu]

the thing is that employers post new jobs but they just post it for their image and wont accept any.

[TheWebhippo]

It's called the Reserve Army of Labor. They need to keep some unemployed as leverage to keep the minimum wage low.

[duncanmoore]

If the end result is forced poverty for the Americans who aren't allowed to gain work, then the system is morally wrong and needs reworking from the ground up.

[ollyshuteye]

Every job I've ever applied for had its own politics and social biases behind it. It's not about merit or qualifications.

[JoeyEnexty]

Ah yes. Applied to 57 jobs in a month and i got the worst one who didn't want me for full time and still hve me working 6 days a week and killing my car off for an 4 hour work day. Good job powell.

[bubbles]

This is the greatest argument for UBI that I have ever seen

[weareorigin]

Jobs in Ohio are paying $11-$17 for assistant managers. That's $23, 000+ per year of income. Some insurance companies charge $8900 per year to insure two adults (without kids). Insane.

[iamjohnporter]

The only thing that is preventing me from finding a job is these job interviews. Every single one I've been too its always the same stupid stuff. I go in, they ask me a bunch questions, and they say "We'll give you a call and see if you qualify for the job". Days and weeks go by and I don't get a single call back. I tried calling them a few times but they its just "We'll get back to you shortly". Feeling frustrated I told them I did a job interview with them a while ago and I wanted to know why is this taking so long. The response I got was "Well we did hire some people so I guess you didn't quality for the job" and I was left feeling very mad and felt like I wasted my time.

[kravond]

A lot of words to say we don’t want to give poor people higher wages!

[SCHMALLZZZ]

Remember when you used to be able to support a family of 4 working in a sheet natal factory?

My grandfather's all made less money than me when factoring inflation, but houses were only a few thousand back then, not a few million.

[carlostanner]

So the the rich DO get richer and the poor get poorer 🤯

[KB-ijfk]

Sorry you and your kids gotta sleep on the sidewalk, it’s for the economy 🎉