Patience of jobs
The vacancies are posted, the workers are there but U.S. employers are hiring at a slower rate. Welcome to America, land of phantom jobs.
At 4.8 million, the nation at the end of August had the most positions available since January 2001, according to the U.S. Bureau of Labor Statistics, which is set to release October employment figures on Friday. Meanwhile, the August hiring rate slipped to 3.3 percent. The biggest gap can be found in low-wage, low-skill jobs. The comparatively high rate of unemployment among less educated workers – 8.4 percent for high-school dropouts compared to 2.9 percent for college graduates – suggests companies are in no real hurry to add personnel.
Politicians and employers are quick to blame a skills deficit. The numbers don’t bear that out. Since 2007, the widening gulf between job openings and hiring has come primarily from the retail, hotel and food service industries, where no more than a high-school diploma is generally needed. And yet those candidates are almost twice as likely to be unemployed as their university-educated counterparts.
Stagnant wages raise further doubts. If employers were really struggling to fill openings, they’d presumably be willing to pay more. And yet adjusted for inflation, high-school grads have actually seen their wages fall over the past decade.
What’s more, there’s evidence that an increasing number of university graduates are taking jobs historically reserved for lesser-educated people. A Federal Reserve Bank of New York study found that roughly 44 percent of recent university grads are in a job that does not demand a bachelor’s degree.
If there are so many workers, including overqualified ones, to fill the void, why isn’t there more hiring? Part of the answer probably rests with the mechanics of the process, which have evolved significantly. Advertising a job is now practically free. Under government criteria, even a Craigslist post counts as active recruiting. To be considered open, jobs must be ready to start within 30 days, but that doesn’t mean employers must hire in that timeframe.
Indeed, efforts to grow workforces are well below the levels of a decade ago, according to the Dice-DFH Recruiting Intensity Index. Postings might linger in cyberspace as choosy companies wait for economic conditions to improve or for the perfect candidate to turn up. Unemployment benefits may be perceived to exceed the value of the jobs available. Either way, illusory openings won’t do much to help the economy.