>According to St. Allan's latest pronouncements, which ranged widely
>and waxed positively philosophical, there's no worry about full
>employment (hence no worry about inflation) because there's so much
>"slack" in the labor market. That is, a lot of people who have
>dropped out (and no longer count as unemployed) do compete for jobs
>when these become available. As a result, unemployment does not fall
>because these "drop outs" take jobs --without affecting the
>unemployment rate.
During the boom, AG talked often about "the pool of available workers," which was running dry. That pool consisted of those officially unemployed plus those classed as "not in labor force - want job now." Since the share of the adult population working has fallen by about two percentage points from the peak, the pool is quite wet and deep now - and real wages are stagnating.
Doug