Jobs go unfilled despite high unemployment
At 8.9 percent, unemployment is still high. But in some industries, jobs are available with no skilled workers to fill them.
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But employers also appear to be holding out for ideal hires for jobs that aren’t facing a skills gap, says professor Steven Davis of the University of Chicago Booth School of Business, who recently co-wrote a paper on the subject. “Our best estimate is maybe 20 percent of shortfall in hires per vacancy in the last couple of years can be accounted for by lower recruiting intensity by employers.”Skip to next paragraph
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Though they may be placing ads, they don’t appear in a rush to fill vacancies.
The Beveridge Curve
A number of economists are closely watching the relationship between the jobs vacancy rate and the unemployment rate—what’s known as the Beveridge Curve, named for economist William Henry Beveridge.
“In March last year the vacancy rate started to rise, without drawing down in the unemployment," says professor Steven Davis, making for what he sees as a troubling move in the curve. “It broke down rather substantially.”
Davis believes the repeated extension of jobless benefits for long-term unemployed workers has made job seekers more willing and financially able to hold out for better jobs. But, in the mean time, their skills are falling behind, making them less employable.
“We have to some extent set ourselves up to have 1 to 2 percent of the workforce without jobs for long time, with dim prospects of returning to a job market even after the market recovers,” he cautions. “That's what kind of worries me.”
"The loop in the Beveridge that is evident now has been seen in the past business cycles," Dudley said in a speech at the Stern School of Business earlier this week. "This strongly suggests that the rise in job mismatch has a cyclical component."
When Workers Can’t Move For Jobs
Mark Zandi, of Moody’s Analytics, believes the shift in the Beveridge Curve is likely temporary. But, he is concerned that the downturn in the housing market may be making it harder for job vacancies to be filled.
Zandi’s own firm is feeling the impact of the skills gap. He’s having trouble finding and hiring junior economists with advanced degrees.
“That part of the job market is tightening up quite significantly.”
Extend Health’s Bryce Williams is actively looking at options beyond his company's base in Utah, and beyond that is also trying to develop a home-based model so that he can bring his jobs to the workers he needs. But he's worried he won't be able to ramp up hiring enough, and that would kill his company's growth.
“What it could require us to do is meter the number of clients we can take on, in any given year," he says.
With the health care exchange sector poised for rapid expansion over the next two years because of the health reform law, Williams is determined not to turn business away.