Monday, August 09, 2010

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.   

11 Comments:

At 8/09/2010 4:27 PM, Blogger Benjamin said...

If you wear a tie, and you are over 55 and you are looking for work...keep looking, and count the years to Social Security.

 
At 8/09/2010 4:45 PM, Blogger fboness said...

Toolmakers? Interesting choice of example. Most of the toolmakers I know are retired.

One becomes a toolmaker through the ancient craft/guild method of a long apprenticeship under the guidance of a master of the craft. It is very high level on the job training.

The first question to ask anyone looking to hire a toolmaker is, "How is your toolmaker apprenticeship program going?" The usual response is, "Huh? We can't afford that."

So they become looters of other companys' toolmaker programs. Traditionally, those programs are at large unionized companies where the unions have promoted the craft apprenticeship programs. They are in decline. The looters are running out of places to loot.

This is deja vu. The companies that fled the "rust belt" for sunny southern climes found they didn't have the industrial support system they took for granted. When they moved back North they found the toolmakers they left behind weren't waiting by the phone for them to call. They decried the toolmaker shortage like the kid who wants more toys but, won't admit that he is the one who broke the toys he had.

 
At 8/09/2010 5:30 PM, Blogger Jet Beagle said...

"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..."

"Some economists fear the U.S. could end up with a permanent caste of long-term unemployed ..."

When agriculture jobs were automated decades ago, those workers learned new trades and moved on. When shipping containers and material handling equipment eliminated the need for thousands of longshoremen, those workers learned new trades and moved on. What's different about today's workers? Why do economists believe these workers will not adapt?

 
At 8/09/2010 9:07 PM, Blogger Buddy R Pacifico said...

fboness has this situation figured out but the number of ads is good news.

 
At 8/09/2010 10:39 PM, Blogger vanderleun said...

Perry,
Why is it that -- things come and go and change and stay in flux -- and yet the 9.5% seems to persist across the months? It is just a rounding phenomenon?

 
At 8/10/2010 8:00 AM, Blogger juandos said...

"yet the 9.5% seems to persist across the months? It is just a rounding phenomenon?"...

It could be the 99 week phenomena...

 
At 8/10/2010 12:56 PM, Blogger Gerald said...

I wouldn't count job listings. Here in Illinois we same the same job appear repeatedly. Last year there was a position for traction motor engineer that appeared for almost 4 months. There's very little market for this specialty. Could someone be gaming the system?

 
At 8/11/2010 6:03 AM, Blogger Emil Perhinschi said...

how about home ownership ? Home owners would be less willing to move to get another job.

 
At 8/11/2010 4:49 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

Few people drawing full jobless benefits from a good paying job will accept a $8 an hour job in food service -- especially for 20-30 hours a week. Many employers in such areas seek part-time workers to avoid benefits costs and themselves later having to pay unemployment benefits.

Libertarian Harry Browne used to say that "government doesn't work." But it DOES work. If govt pays people not to work, many won't.

And often these are making a reasonable choice -- based on perhaps the false premise that their old jobs will be again soon be in high demand.

 
At 8/11/2010 5:55 PM, Blogger sethstorm said...


Few people drawing full jobless benefits from a good paying job will accept a $8 an hour job in food service -- especially for 20-30 hours a week. Many employers in such areas seek part-time workers to avoid benefits costs and themselves later having to pay unemployment benefits.


It is only rational that they do work in their own best interest. Why should a business be exempt from competing with the unemployment wage and conditions of other employers? Or does an employer get a free pass where a worker never should?

Otherwise don't be surprised that you get the worst of the backstabbing worst. The same people that end up taking from your business and trashing it over time.

--

Pay more, treat the people with respect, and not try to get out of regulations. Then you might get to fill those positions. At least that's how it's worked for ages.

 
At 8/13/2010 3:34 PM, Blogger juandos said...

More Marxist babble from the sethstorm: "Why should a business be exempt from competing with the unemployment wage and conditions of other employers? Or does an employer get a free pass where a worker never should?"...

Who's money is it that pays the worker sethstorm?

Its definitely NOT your money so what makes you think you or the socialists clowns in D.C. think they can run a business better than business people?

 

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