Are job openings really just becoming impossible to fill? Unless you are referring to North Dakota, there should be an ample supply of willing and able-bodied workers that can be hired for an open job. So, when you hear about unemployment benefits being extended to however long they have been extended now it might make you wonder how and why there are millions of job openings in America right now.
The BLS reported this morning that there were a whopping 3.6 million job openings as of the last business day of May. That is up from 3.4 million job openings from April. The hires rate of 3.3% and the separations rate of 3.3% were essentially unchanged in May and the numbers include “estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by geographic region.”
Over the 12 months ending in May, the hires rate was little changed for total nonfarm and total private jobs but increased for government. The hires rate declined over the year in construction but rose in transportation, warehousing, utilities, and federal government.
Where things get interesting is the “separation rate” which includes layoffs, discharges, and quits. The number of quits by workers rose to 2.1 million in May from 1.8 million at the end of the recession in June 2009. The number of layoffs and discharges for total nonfarm jobs was 1.9 million in May 2012, down from 2.1 million at the end of the recession in June 2009. The gains in “quits” from April to May took place in the following sectors: Professional and business services; Leisure and hospitality; and State and local government. The number of quits also rose in the Midwest and the Western U.S., while they fell in the Northeast and the South.
3.6 million job openings at the end of May… And only 80,000 jobs created in June? The BLS reported on last Friday that the number of unemployed persons was 12.7 million and that the unemployment rate was static at 8.2%. It is understandable that some jobs take a while to fill and/or that they require skills that workers may have lost after being unemployed for a year or more. Still, 3.6 million unfilled job openings is enough to irritate just about anyone wondering about the future of the American worker.
Let’s just do some simple math here for a second. We understand that not every job can be nor will be filled and using straight-line math can sometimes simplify a much more complicated situation such as employment rates. Things that have to be considered are geographies, underwater housing, marital status and spousal employment situations, school districts, worker skills, and more. Still, just look at the simple math even if some of these jobs might be considered underemployed (attorneys flipping hamburgers) if filled… 12.7 million unemployed versus 3.6 million jobs open… That means that more than 28% of those 12.7 million unemployed could in theory be employed. Using straight-line math, taking out 28% of the 8.2% unemployment rate gets the unemployment rate just under 6%.
At what point do the government workers handing out unemployment checks need to have the responsibility of sending the unemployed on interviews for these 3.6 million job openings?
JON C. OGG