The Historical Beveridge Plan and Concepts of Full Employment

In an influential report written during World War II, Full Employment in a Free Society, the British economist Sir William Beveridge defined full employment as “having always more vacant jobs than unemployed men [sic], not slightly fewer jobs.” These jobs, Beveridge stressed, should pay fair wages and be located where the unemployed could be expected to take them. Beveridge  allowed for the existence of some unemployment, but only of a very temporary nature, since those who lose jobs must be able to find “new jobs within their capacity, without delay.”

Beveridge clearly defined full employment in terms of the human beings who are out of work. An employer who has difficulty buying labor suffers at worst from an inconvenience or reduction of profit,  whereas a worker unable to find a job is being told “he [sic] is of no use”; it is a “personal catastrophe” even if an adequate income is provided by unemployment insurance. Even short-term unemployment is not to be lightly regarded, according to Beveridge, because no one can know that he or she is one of the short-term unemployed until he or she has found work again. In Beveridge’s view, the government should guarantee full employment through its economic policies. Full employment thus becomes the foundation of the welfare state in which jobs are to be made available for those who can work. And social-welfare programs ensure an adequate income for those who cannot work because of old age or illness, or for other reasons. They provide health care, social services, and children’s allowances regardless of employment status. The Beveridge plan guided the British Labor party government after World War II….

At the simplest level, full employment means jobs for all, with the emphasis on giving everybody the opportunity to work so that no one who is able and willing to work lacks employment. It is a purely quantitative goal, in which wages, working conditions, and duration of unemployment are not considerations. Even someone forced to work less than a normal work week because of an inability to find full-time work would be considered employed.

A slightly higher concept is the idea of a good job with a living wage for all. Such a goal implies that jobs with substandard wages and working conditions or involuntary part-time work would not be considered  adequate  to meet the full-employment goal.

A still higher standard is “jobs for all with decent pay and conditions and realistic opportunities for upward mobility and work at full capacity.” (Economist Russell A. Nixon, 1973). The additional emphasis is on utilization of the abilities and skills of workers. This would mean, for example, that female (or male) college graduates would not end up as clerical workers; and that job ladders, as another example, would enable unskilled hospital works to receive training and the opportunity to advance to more skilled jobs.

From Helen Ginsburg, Full Employment and Public Policy: The United States and Sweden, 1983.

Further reading: William Beveridge,  Full Employment in a Free Society, 1944.