I think there are problems with Mike Cassidy’s interpretation of the seeming conflict between the large number of unemployed and the large number of job openings:
In other words, based on historical patterns, we’d expect the level of job openings we see today to produce a lower unemployment rate than the one we have. The job market should be better than it is. –
This disconnect — persistent unemployment and underemployment despite lots of vacancies — has fueled debates among economists. Some see it as proof that the workforce lacks the skills employers value, while others take it as evidence that demand for the products and services American companies make has not recovered as fully as we’d like to think. Which side of this debate you fall on will dictate your policy preferences; for example, those in the former camp generally oppose fiscal and monetary stimulus, while those in the latter support it.
There’s another possibility that Mr. Cassidy ignores but which should be obvious to anyone who’s ever hired anyone: a lot of the jobs on offer are phantoms. There are companies, particularly large companies, who are fishing for bargains. I’d summarize it this way. When you offer to buy quarters for a nickel apiece, the only people who’ll sell you their quarters are those who are really desperate to get rid of them.
I also think that the large number of two-career households has something to do with it. Not only does it mean there are fewer people really desperate to get rid of their quarters but it also means that people are less likely to move to where the jobs are than they used to be. The opportunity would need to be pretty darned good in order outweigh the cost of abandoning one job in order to take one job.
I think your last is a very good point, and then add in that a lot of people are probably still upside down (or nearly so) in their mortgages. Has anyone examined mobility to see if it has decreased since 2008?
Quite a bit has been written on it. Here’s one place to start.
Wages. If companies are really having trouble hiring, and they really do want to hire, wages will increase. They have not.
Steve
Yes, companies, especially the largest, have advertised a lot of jobs that were either non-existent or were being advertised solely to meet some sort of requirement when they had someone specific in mind. Saw that with a couple of defense contractors down here a few years ago, before I finally gave up. Not sure why the first thing was done, but it reached absurd levels. I’m too bored with the stories to repeat (you’re welcome), but I never did understand these things some sort of internal bureaucratic BS with the companies, I suppose….
Steve’s point about wages is excellent.
Another point: companies will not give the LTUE such as myself the time of day. They simply will not consider hiring anyone out of work for a long time unless you’ve got some kind of pull, such as a relative that likes you in a position of influence with the company. We won’t be hired again unless the economy either booms or we put a gun to someone’s head. That said….
Perhaps companies are advertising jobs offering non-competitive compensation as a ploy. They won’t touch people like me, for whom many company packages would look dreamy, and no one with a similar position is going to take the risk of switching jobs and losing seniority for a job that’s no better or worse. further, make the requirements such that people looking to move up CAN’T meet the requirements.
Once this goes on long enough they can lobby congress for more cheap foreign labor. This seems to be a model for many stem fields, where despite decades of claims of shortages wages have stagnated.
Ultimately this looks like another case of implicit collusion.
I think Steve’s comment is spot on. It’s direct and reflects how the world works. No need for all types of alternative speculation.
I’ll resist the temptation to observe that’s how markets work…………oops.
Here’s a piece lifted from the maligned ZeroHedge which graphically supports Steve’s observation on wages and labor demand………..but which also makes those thorny points about a Fed bloated equity market, and the powerful political interest that loves it. (Fast forward to Dave’s later post). No cherry picking, steve.
http://www.zerohedge.com/news/2015-02-06/why-goldman-suddenly-banging-table-scariest-chart-jobs-report
They aren’t always wrong. While I am suspicious of a graph that starts and ends in such disparate times, I think it is a useful tool. Employment is not where it needs to be. However, I still don’t see increasing rates as the panacea to cure that problem.
Steve