Have we given up on full employment? So long as the political parties content themselves with pretending to stimulate the economy, indeed so long as economic growth itself is the focus, we have. The best that we can hope for if we keep on this road is an unemployment rate of 7 or 8 per cent , the so-called "natural rate." That is a long way from full employment. And since that means the economy is not using all of its productive resources, living standards are that much lower. So all of us are worse off, not just the unemployed.

If we were serious about unemployment, we would start by tackling some of the more puzzling features of the Canadian labour market. The dichotomy has been well marked: At the same time that many workers are forced to make do with part-time employment, many others in full-time positions find their employers pushing them to work overtime -- that is, full time and then some. The one thing employers seem reluctant to do is to hire more full-time workers, as evidenced by the sluggish growth in employment of the past year.

But if so, how do we square that with the concomitant surge in demand for labour, as measured by Statistics Canada's help-wanted index? With so many unemployed, why has the federal government, responding to the pleas of industry, had to look overseas to find 12,000 new software engineers? Or if a slow economy is the problem, why is it that Japan has emerged from its recent recession with an unemployment rate of about 3 per cent, or less than half as high as Canada seems capable of at the peak of the business cycle?

To find the answers to these questions, we will have to put aside our obsession with the macro-economy, the growth fix that has mesmerized public debate for so long, and concentrate instead on the micro-economic foundations of the labour market. Rather than looking at jobs as things, as in "job creation," we might then look at a job more as a relationship, the intersection of the supply and demand for labour. And we might begin to ask: what is it about the market for labour that prevents willing buyers and willing sellers from reaching each other, as they generally do in other markets?

The unhappy answer is that in many ways this arrangement serves the interests of the employed majority.

If there is a "reserve army of the unemployed," as Marx claimed, it is not the means by which corporations connive to suppress wages: rather, it is the result of a variety of measures, legislative or otherwise, aimed at propping up wages and other forms of compensation above full-employment levels. That's wonderful for those who have jobs, but not much use to those without. Indeed, these very benefits and protections act as a sort of tariff barrier, preventing the unemployed from bidding down wages enough to gain entry to the labour market.

Economists sometimes call this the "insider-outsider" problem. It isn't only a matter of ill-advised government intervention. It seems to be a failure endemic to labour markets themselves. Neither party to a wage negotiation, that is, has much interest in the welfare of the unemployed. Obviously the labour side will hold out for as high a wage as it can. But employers, too, seem willing to pay a premium above the full-employment wage, in order to reduce turnover and minimize chances of a strike. The problem, which may require more government intervention rather than less, is how to deal the unemployed into the bargaining.

But certainly governments don't help, so far as they have further diverted wages from their essential task of preventing shortages and surpluses in the market for labour, whether by minimum wage laws, pay equity legislation, or the many privileges afforded to unionized labour. Nor even do they serve the cause of the unemployed by measures ostensibly designed to protect them, such as severance provisions and mandatory layoff notices: for the harder it is for employers to fire workers, the more reluctant they will be to hire them in the first place.

It isn't that the goals of such interventions are unworthy, but that there are better means of achieving them than by tying labour markets in knots: for example, by guaranteeing a minimum income, paid for out of taxes, rather than a minimum wage. Coming to that realization will require a turnabout in our thinking, however. There is nothing progressive in measures that effectively lock the unemployed out of the labour market. Until we put the interests of the unemployed first -- ahead, if necessary, of those who are employed -- we have not really begun to address the unemployment problem.

To put it very bluntly: if the 9 workers in ten who have jobs were willing to make do with a little less, then the 1 in ten without would not have to make do with nothing.