Economic oddity: record job vacancies and many unemployed people

WASHINGTON — The disconnect is shocking: Across the United States, employers desperate to fill jobs have posted a record number of job postings. They also raise salaries and offer bonuses to people who accept job offers or recruit their friends.

And yet millions more Americans are out of work compared to the number unemployed just before the viral pandemic flattened the economy a year and a half ago.

RunX CEO Ankur Dahiya (center) participates in a video meeting with employees at a rented office in San Francisco on August 27, 2021. Tech companies like RunX that have led the charge in remote working since January 27, 2021. start of the pandemic are faced with a new challenge as it all ends: how, when and even if they must bring their long-isolated employees back to offices designed for teamwork.

The puzzling mismatch is a reflection of an unstable economy – an economy that all but shut down during the height of the pandemic, then rebounded with unexpected speed and force thanks to the rollout of vaccines and vast injections of government spending.

And now the economic outlook is clouded again by a resurgence of Covid-19 cases linked to the highly contagious Delta variant.

On Wednesday, the Labor Department reported that employers posted 10.9 million job vacancies in July, the highest number since 2000. For job seekers, the abundance of job vacancies is a welcome event.

Unprecedented demand

Yet the sheer size of vacancies poses a potential problem for the economy, especially if it persists over the long term: Companies with a shortage of employees cannot capitalize on increased consumer demand, hampering Economic Growth.

The unprecedented demand for workers comes even as 8.4 million Americans are unemployed, up from 5.7 million in February 2020. And the economy still lacks 5.3 million jobs compared to the number it needs. ‘she had before the pandemic crippled the United States.

“Employers are very keen on recruiting staff right now, especially in industries that have been hit hard by the pandemic,” said Nick Bunker, head of research at the Indeed Hiring Lab. “But many unemployed people and job seekers don’t have the same sense of urgency.

Some job seekers remain fearful of the coronavirus, especially given the spread of the Delta variant. Some have struggled to find or afford child care at a time when the status of schools is changing. Others are rethinking their lives and careers after being locked away at home and spending more time with their families.

Whatever the reason, many “don’t feel the need or the desire to just go into a job right now,” Bunker said.

The most needy employers increase wages to try to attract workers. Over the past year, average hourly wages, even after adjusting for inflation, jumped 5.8% for restaurant and bar workers and 6.1% for restaurant and bar workers. hotels.

“It may also be time to pay more attention to the genuinely ugly nature of many of the jobs available,” wrote Joshua Shapiro, chief U.S. economist at consultancy Maria Fiorini Ramirez Inc., in a research note, adding, “Let’s face it, even $ 20 an hour with little to no perks is not a princely sum.”

Shapiro suggested that some employers will need to consider offering more flexible working hours, better parental leave policies and improved health care benefits.

Meanwhile, workers are leaving their employers in historic numbers, apparently confident enough in their job prospects to try something new. In its report on Wednesday, the Labor Department said 3.98 million people left their jobs in July, just short of the record 3.99 million who did so in April.

“Too generous”

Many companies have criticized generous federal unemployment benefits – including an extra $ 300 per week in state assistance – for allowing the unemployed to take their time to return to work. In response, about half of the states withdrew from the federal program. But in a report last month, economists Peter McCrory and JP Morgan’s Daniel Silver found a “zero correlation,” at least so far, between job growth and states’ decisions to drop out. federal unemployment assistance.

Either way, federal benefits ended across the country on Monday, just as more schools are reopening. Bunker said he hopes the job market will return to its pre-pandemic state next year.

The Delta factor

Again, the Delta variant and the slight increase in Covid-19 cases it causes may slow the recovery. The Labor Department reported on Friday that employers created just 235,000 jobs in August, just about a third of the number economists predicted and a dramatic drop from around 1 million jobs created in June and July each.

With the Delta variant discouraging some people from venturing out in August, restaurants and bars cut 42,000 jobs, the first such monthly drop this year.

Hotels added just 7,000, the least since January.

“Growing fear of the virus amid a new wave of Covid infections will likely delay the return of some people to the workforce,” said Lydia Boussour, chief US economist at Oxford Economics. “While we expect the labor market to continue to advance in the coming months, it will likely take some time for these severe labor imbalances to resolve. “

Images courtesy of AP / Marta Lavandier and AP / Eric Risberg

Source link

About Sylvia Helt

Check Also

‘YouTube of Hope’ gears up for next fundraising jump

The company behind a Scotland-grown mental wellness platform gears up for multi-million pound fundraiser as …