George Osborne has today made a pledge to restore Britain to “full employment”. It is not at all surprising that the chancellor is setting his ambitions in terms of jobs because that is the one area of the UK economy that has performed extremely well over the past four years.
Economic growth has disappointed as the economy stagnated in 2011 and 2012. Living standards are well below 2010 levels even with the growth that has been achieved. Tax revenues are causing concern across government because they are persistently weak. And productivity – output per hour worked – has been close to the worst among advanced economies, raising big and difficult questions over Britain’s ability to sustain rises in living standards once unemployment has returned to normal levels.
But what does Mr Osborne think constitutes full employment? Here are some possibilities.