Saturday, April 14, 2018
Is Anybody Out There?
The ratio of unemployed persons to job openings is now down to 1.1, meaning there are 1.1 unemployed people per job opening. There are currently over 6 million job openings in this country. Just as a point of reference there were less than 2.2 million in July 2009. Now you can pick at the data noting that we’re not counting all of the potential workforce. That we have a lot of drop-outs. Or that the “job opening” data is questionable. That many of these openings are not really “open”, that some companies are always looking for certain types of people, but that doesn’t mean they will hire.
OK, so the data isn’t perfect. But it is relative and going from 2.2 million job openings to over 6.0 million means something. Back in July 2009 when we had just under 2.2 million job openings, there were over 14.5 million unemployed people looking for work, a 6.6 to 1 ratio. Today’s ratio of 1.1 to 1 tells us there are around 6.6 million people looking for work. In July 2009 the number of employed people was just over 139 million. Today that number is 155 million. So we’ve covered 9 million of the “out of work and looking” from July 2009 and added another 7 million to the employment roles. What’s even more interesting is that the labor participation rate hasn’t changed much. In July 2009 59.3% of the population was employed. Today it’s 60.4%. The “civilian” labor force participation rate in July 2009 was actually higher (65.5%) that it is today (63.0%).
Slice it anyway you want to and the message is the same, we don’t have enough qualified workers to fill all of the jobs that need to be filled. Unemployment is still personal and if you are among the unemployed, especially the long-term unemployed, all of these “job openings” aren’t doing you much good. There are a lot of reasons why some folks can’t get a job. Some can be overcome, some cannot and some are against the law. Life isn’t fair and neither is the job market even when we pass laws to make it so. It is a competition and when you are unable to compete or are not allowed to compete, the result is the same…unemployment. But that aside, the reality is that there are simply not enough “employable” people for the jobs that need to be filled where they need to be filled.
I mentioned a few weeks ago that the generation on the way up is significantly larger than the generation on the way out: 150 million Gen X and Gen Z replacing 80 million Baby Boomers. This will make a positive difference in some job markets. But we are still likely to face significant shortages in skilled trades and the no-collar/blue-color labor market. In the mean time, employers will be forced to adjust: increase compensation, substitute capital (technology) for labor, re-design jobs to make them more attractive or move the work to where the workers are. Things will change. They must.