From the beginning of our history, politicians have often called for full employment as a national goal, yet full employment has also been seen as a cause of inflation and so is undercut by decisions by the Federal Reserve in order to prevent inflation. Unemployment changes over time in terms of causes, makeup, degree of severity, and possible solutions, and over the last decade unemployment has both been reduced and has also changed its makeup in terms of the kinds of industries experiencing unemployment and the proposals for solving the problem. The highest job losses in the last decade have been in traditional bread-and-butter industries such as manufacturing, and this is seen as part of a shift in the economy to the new information age paradigm as workers are moved from manufacturing jobs to a service economy.
In truth, unemployment for the individual is a very relative concept. Under current U.S. definitions, the worker has to be actively looking for work to be counted as unemployed; if the worker has given up the search for work as hopeless, he or she does not count as jobless. One reason for this may be that statistics on unemployment are collected with employers in mind, and employers care only about the degree of slack in the labor market. this means that they prefer just enough unemployment to keep workers a bit concerned, but not so much as to threaten economic and political stability. Workers only marginally attached to the labor force do not enter into this calculation. This is what the mainstream debate over the statistical level of "full employment" is really about, and orthodox economists disagree over the precise numerical level which constitutes "full employment", whether 5 percent, 5.5 percent, 6 percent, or 6.5 percent. It is believed that the fundamental principle holds, however, and that if the unemployment rate gets too low, wages will rise, leading to "inflation" ("Unemployment: An LBO Overview")....