Labor Market Weakness Is Still not due to Workers Lacking the Right Skills

The figure below shows the number of unemployed workers and the number of job openings by industry. This figure is useful for diagnosing what’s behind our sustained high unemployment. If our current elevated unemployment were due to skills shortages or mismatches, we would expect to find some sectors where there are more unemployed workers than job openings, and some where there are more job openings than unemployed workers. What we find, however, is that unemployed workers dramatically outnumber job openings across the board. There are between 1.1 and 6.5 times as many unemployed workers as job openings in every industry. In other words, even in the industry with the most favorable ratio of unemployed workers to job openings (health care and social assistance), there are still about 10 percent more unemployed workers than job openings. This demonstrates that the main problem in the labor market is a broad-based lack of demand for workers—not, as is often claimed, available workers lacking the skills needed for the sectors with job openings.

Figure A

Unemployed and job openings, by industry (in millions)

Industry Unemployed Job openings
Professional and business services 1.151667 0.792083
Health care and social assistance 0.719667 0.665667
Retail trade 1.179833 0.473667
Accommodation and food services 0.975167 0.544
Government 0.734333 0.421333
Finance and insurance 0.27225 0.216333
Durable goods manufacturing 0.518667 0.174417
Other services 0.40575 0.143417
Wholesale trade 0.171167 0.145917
Transportation, warehousing, and utilities 0.38375 0.157833
Information 0.163667 0.103083
Construction 0.815333 0.126167
Nondurable goods manufacturing 0.343667 0.10575
Educational services 0.23275 0.073333
Real estate and rental and leasing 0.126 0.052
Arts, entertainment, and recreation 0.226167 0.074583
Mining and logging 0.05425 0.026833
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Note: Because the data are not seasonally adjusted, these are 12-month averages, September 2013–August 2014.

Source: EPI analysis of data from the Job Openings and Labor Turnover Survey and the Current Population Survey

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