Millions of open jobs are going unfilled, despite high levels of unemployment.
According to government data, companies had 9.2 million open jobs in May -- the highest number on record going back to 2000.
The latest U.S. jobs report revealed that 8.7 million people were unemployed in July, while another 6.5 million people weren’t in the labor force, but wanted jobs.
The labor market is really complicated, and it’s not always obvious why companies and workers do the things they do. But there’s clearly a disconnect between the jobs that are available, the compensation they offer, and what workers are looking for.
Looking at the big picture, perhaps it’s not surprising that the labor market is taking a while to recover. The pandemic has drastically changed how we live and how companies do business.
Some industries have benefited, while others have been crushed. Economists say businesses are facing these big picture concepts:
- Many workers are struggling with school and childcare arrangements.
- Jobs in retail and hospitality carry a new level of health risk.
- Some workers have relocated.
- Job seekers may not be willing to resume commuting.
- Millions are afraid of being exposed to the coronavirus.
- Workers may not have the right skills for jobs in new growth industries.
- Unemployment benefits could allow some workers to wait longer for the right job.
All of this working in conjunction helps explain why the unemployment rate is still 5.4%, compared to 3.5% in February 2020 before the pandemic arrived.
Policymakers will need to find ways to address the crisis if it drags on much longer. The Fed doesn’t have a silver bullet, and the central bank could use more help from Congress.