A Closer Look

US / What explains the yawning gap between jobs open and jobs filled?

One possibility is that there is a mismatch between the work that companies need done and the skills that workers have. As Peter Newland of Barclays Plc has said, “We believe that this divergence between openings and hiring is consistent with our view that some of the loss of employment during the recession was structural, rather than purely cyclical, in nature.”

Such a structural mismatch may well explain part of the gap, yet it seems unlikely that it explains most of it. After all, job openings in the retail trade have doubled over the past three years, while hiring has been flat. Is it plausible that we lack qualified workers for these jobs?

Wage Calculations

A second explanation is that employers are offering jobs at wages that are too low to attract good applicants. Alan Krueger, a labor economist at Princeton University who recently stepped down as chairman of President Barack Obama’s Council of Economic Advisers, believes this to be an important piece of the puzzle. He argues that the unemployment rate for those just recently out of work has now returned to roughly pre-crisis levels, and that people who have been out of the labor force for an extended period are exerting little downward pressure on wage rates. This combination means that, although the long-term unemployed still face a tough road ahead because they are essentially on the margins of the labor market, pressure is growing for higher wages for everyone else.

Chosen excerpts by Job Market Monitor. Read the whole story at 

Capture d’écran 2013-08-15 à 08.37.24

via Orszag: Number of Job Openings Soaring, Hiring Barely Rising.

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