Minding the Gap
We’re not technically in a recession, but unemployment is still quite high at 8.6%. You’d think there were no jobs to be had, but a quick look at craigslist or simplyhired shows thousands of jobs up for grabs. The Department of Labor puts the number of job openings at 3.3 million. So there are jobs to be had. Yet the number of unemployed workers is at 6.9 million. That’s over twice as many people who would be needed to fill all those jobs. Why then are those jobs still open? I can conjure up a number of guesses.
1. Location. The worker and the job are in different geographic areas. I have yet to see a nice map overlaying worker location and job location, so I can’t say much about this guess.
2. Lag. It takes time for job and worker to find one another. I can’t tell how long these jobs linger on the market, just waiting for the perfect worker to stroll along. The Bureau somewhat accounts for any lag by counting only those “job openings” where “work could start within 30 days regardless of whether a suitable candidate is found.” Still, it’s hard to say if lag matters.
3. Skills mismatch. I think the most significant factor that explains why we don’t have zero job openings and only 3.6 million unemployed workers is that there is a mismatch between worker skills and job requirements. “Hilda Solis, U.S. Labor Secretary, commented in her address that this mismatch is one of the reasons for the high unemployment rate.” (Source.) The CEO from Siemens said as much in a recent Huffington Post article. He reported that his company’s “15 divisions in industry, energy and healthcare employed around 405,000 U.S. workers last year,” and it “has around 3,200 job vacancies,” which he says have been no easy task to fill. The Wall Street Journal recently reported research that 1/3rd of the unemployment increase is due to college-educated workers lacking skills need for the jobs available. (There are still far more unemployed less-educated workers, to be sure.) And the Telegraph in the UK has reported similar mismatches. One PBS report chalks up the mismatch to structural unemployment, which means that “because of the progress of technology and globalization, lots of our old jobs are gone, and new ones require skills that many just don’t have.”
How might we fill the gap? Next post, I’ll discuss.
