Workers who lose the fear of job loss may become ornery. They may demand higher wages, or more leisure time. Profits may suffer.

In some countries with well-organized labor movements and business sectors the problems have been mitigated through corporatist wage restraint. The Swedish Rehn-Meidner plan was one particularly well-articulated mid-20th century approach to the problem, although it has fallen apart somewhat in the last 20 years or so.

One conclusion:

A natural inference of what I'm saying is that capitalism and sustained full employment are incompatible.

I'm not sure I'd go that far, but it is food for thought. We certainly would need a very different kind of capitalism than we have now to get back to full employment.