The Unemployed Exceed Job Openings in Almost Every Industry
One of the recurring myths following the Great Recession has been that recovery in the labor market has lagged because workers don’t have the right skills. The figure below, which shows the number of unemployed workers and the number of job openings in December by industry, is a useful way to examine this idea. If today’s labor market woes were the result of skills shortages or mismatches, we would expect to see some sectors where there are more unemployed workers than job openings, and others where there are more job openings than unemployed workers. What we find, however, is that there are more unemployed workers than jobs openings in almost every industry.
The notable exception is health care and social assistance, which has been consistently adding jobs throughout the business cycle. There is now one unemployed worker for every job opening in that sector, suggesting a tighter labor market for those workers. However, we have yet to see any sign of decent wage gains yet, which would be the final indicator that the labor market, at least for those workers, were approaching reasonable health.
Other sectors have seen little-to-no improvement in their job-seekers-to-job-openings ratios. There are still about six unemployed construction workers for every job opening. In other words, despite claims from some employers, there is no shortage of construction workers.
Taken as a whole, these numbers demonstrate that the main problem in the labor market is a broad-based lack of demand for workers—not available workers lacking the skills needed for the sectors with job openings.
Unemployed and job openings, by industry (in millions)
|Professional and business services
|Health care and social assistance
|Accommodation and food services
|Finance and insurance
|Durable goods manufacturing
|Transportation, warehousing, and utilities
|Nondurable goods manufacturing
|Real estate and rental and leasing
|Arts, entertainment, and recreation
|Mining and logging
Note: Because the data are not seasonally adjusted, these are 12-month averages, January 2014–December 2014.
Source: EPI analysis of data from the Job Openings and Labor Turnover Survey and the Current Population Survey
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