Despite 9.5% Jobless Rate, Firms Struggle to Hire; Help Wanted Ads Increased by 1m Since Apr. 2009
Wall Street Journal -- "With a 9.5% jobless rate and some 15 million Americans looking for work, many employers are inundated with applicants. But a surprising number say they are getting an underwhelming response, and many are having trouble filling open positions.
"This is as bad now as at the height of business back in the 1990s," says Dan Cunningham, chief executive of the Long-Stanton Manufacturing Co., a maker of stamped-metal parts in West Chester, Ohio, that has been struggling to hire a few toolmakers. "It's bizarre. We are just not getting applicants."
Employers and economists point to several explanations. Extending jobless benefits to 99 weeks gives the unemployed less incentive to search out new work. Millions of homeowners are unable to move for a job because the real-estate collapse leaves them owing more on their homes than they are worth.
The job market itself also has changed. During the crisis, companies slashed millions of middle-skill, middle-wage jobs. That has created a glut of people who can't qualify for highly skilled jobs but have a hard time adjusting to low-pay, unskilled work like the food servers that Pilot Flying J seeks for its truck stops."
Some economists fear the U.S. could end up with a permanent caste of long-term unemployed, like those that weigh on government budgets in some European countries. "It is a very worrisome development," says Steven Davis, an economist at the University of Chicago's Booth School of Business. "It leads over a long period of time to social alienation as well as economic hardship."
MP: The chart above helps to illustrate the situation described in the WSJ article. Online help wanted ads (available from the Conference Board) reached a 20-month high in July at 4,293,300, the highest number since November of 2008, and an increase of more than 1 million since the April 2009 low of 3,188,800. During the same period (April 2009 to July 2010), the jobless rate has remained stubbornly stuck at between 9-10%, despite an increase in more than 1 million new job openings.