Good news! The Bureau of Labor Statistics says the number of job openings in June was the highest since 2008.
But wait a minute. The number of actual net jobs added per month, while fluctuating quite a bit, looks pretty flat over the last couple of years.
If there’s so many more jobs these days, why aren’t more people getting hired?1. Well, the numbers could just be wrong. There are plenty of people who inherently equate the BLS with propaganda. It’s hard not to be skeptical when the numbers keep getting revised; unemployment claims often go “down” in the headlines, comparing last week’s upwardly revised number with this week’s original number that will probably be revised upward next week when they claim that next week’s numbers go down even though nothing has really gone down at all.
The BLS is working with imperfect and incomplete data, even if they perform “seasonal adjustments” with the best of intentions (don’t the gurus say the best job openings are never listed?). But I see no evidence to believe their numbers are outright fraudulent. Even if they are off by some X%, whether large or small, it’s reasonable to believe that an increase by their standards reflects an increase in the real world.
Additionally, I am seeing more and more articles about businesses struggling to fill a rising mass of job openings. (Here is a recent one about manufacturing in Indiana, and one about trucking jobs.) I believe there really are a lot more jobs available right now then there were two years or even one year ago, so where are the hires?
2. Maybe companies are being too stingy. When companies complain they can’t find workers for their positions, it’s easy to say they’re being too greedy. Just read some of the comments on the trucking job article. There are supposed to be “200,000 job openings nationwide for long haul truckers,” but if they come with long hours, low pay, and no help getting a commercial driver’s license, well, no wonder nobody wants the job!
There may be some truth to this, but this feels like the sort of problem the market should correct on its own. If a company needs to hire someone and they can’t find anyone, they should increase their pay/benefits/training until they can attract someone; otherwise they’re just losing money. (I’m assuming they don’t have to offer something so attractive that they’d lose more money, but then it’s not really a job opening any more.)
Maybe the severity of the downturn is slowing this correction, as companies may mistakenly believe there are enough unemployed people out there that they can find someone at their asking price. Maybe the reallocation of skills is sharp enough that more companies will need to offer more training. Maybe there’s enough uncertainty that companies are hesitant about how much more attractive they can afford to make these job openings. Maybe the market will bring these corrections in time; if not, there must be something else going on.
3. Maybe unemployment insurance is encouraging people not to work. If the government is paying people to stay home, maybe they think they can be pickier about the kinds of jobs they want. The Indiana manufacturing article even quotes someone from the Chamber of Commerce saying, “Some apply and then decide they want to wait until their unemployment benefit runs out before taking a factory job.” If you think most people use unemployment to be lazy, you haven’t met enough unemployed people. But if you think it doesn’t at least slow a lot of people from getting new jobs, you haven’t met enough unemployed people, either.
4. Maybe people aren’t moving enough. There are tons of jobs in North Dakota, so why aren’t more people moving there to take them? Maybe there’s too many people with underwater mortgages who literally can’t afford to sell their house. Supposedly the housing market has reached the bottom (again), so maybe that will help, albeit slowly (there are also rumors that the “shadow inventory” of foreclosed houses will flood the market and drag it lower). But regardless of how much the housing bust is to blame, there is evidence that mobility has been dropping, and maybe that is causing fewer people to find jobs than would have in the past.
5. Maybe there’s something else going on entirely, or maybe this shouldn’t even be surprising. Maybe there’s some structural, fundamental explanation having to do with lagging and leading indicators; there was a similar increase in job openings reported from 2004-2007 with a similar flatline (perhaps even a slight decrease) in added jobs.
I could continue to speculate, but I don’t want to A) bore you, or B) risk sounding more ignorant than I already do (ex. Hey! Maybe people are spending too much time on the Internet instead of networking with real people and finding out about those hidden job openings!). I don’t know why job openings are increasing without more people getting hired, and I can only hope that market forces will eventually bring things in line once again (not very encouraging to you market disbelievers, I know). For now all I can say is the increase in job openings is mood affiliation for my biased rejection of the Wolfers & Co. claim that fiscal cliff uncertainty is demonstrably harming the economy. But maybe that’s having some effect, too.