Last week I wrote about matching the number of job openings to the number of unemployed people by industry. The numbers were arresting. I used data from the Economic Policy Institute’s Heidi Shierholz.
In that post, Unemployed Workers Still Far Outnumber Job Openings in Every Major Sector, Shierholz provided this graph showing the Job-Seekers ratio from December 2000 through April 2013 based on data from the BLS JOLTS Survey and Current Population Survey:
This is an incredible view of the last 13 years. The Jobs-to-Seekers ratio in December 2000 was 1 to 1.1: pretty much full employment. The unemployment rate that month was 3.9%, which means that even people who didn’t want to work were working.
As I read the data, though, it looks a little odd: the CPS (Current Population Survey) and the JOLTS Survey together show that in April while there were 3,737,000 reported job openings, 4,425,000 workers were hired and 4,279,000 workers were separated for a net employment increase of 146,000. Which means that 688,000 more workers were hired than there were job openings. Even if these April hires were from the March job openings (3,875,000), there were still 550,000 more hires than openings.
So the hidden job market must be alive and well if we’re hiring more than half-a-million more workers than there are reported openings. Think about that. And think about the reported skills shortages. And think about the difference between structural and cyclical unemployment (which I wrote about here).
The reason our unemployment rate continues to stay at an unacceptable and economy-stopping 7%+ may not be so related to the lack of new job creation – we appear to be filling more than the reported number of job openings every month! – but to the scarcity of specific skills and talent. So maybe the skills gap is real and the 9,000,000+ workers who are unemployed will stay that way until they acquire new skills or further lower their job targets.
Either way, that’s not good news for employers with openings they can’t fill, workers who can’t find jobs for the skills they have, or our economy which can’t get out of 2nd gear.
The hidden job market is very much alive. Too bad that’s not good news.