In construction and every major industry, including manufacturing and transportation, work is missing and not the right workers as politicians claim.
The April Job Openings and Labor Turnover Survey (JOLTS) released last week by the U.S. Bureau of Labor Statistics shows that job openings fell by 118,000 in April to only 3.8 million. Job openings have seen little improvement during the last year and are still depressed. In 2007, there were 4.5 million job openings each month. April’s rate of 3.8 million is more than 16% below the levels before President Bush’s Great Recession kicked in.
An economist from The Economic Policy Institute, Heidi Shierholz, says that unemployed workers far outnumber job openings in every sector, demonstrating the main problem in the labor market is a broad-based lack of demand for workers – and not, as is often claimed by Republican and Democratic politicians, available workers lacking the skills needed for the sectors with job openings. (Read Unemployed Workers Still Far Outnumber Job Openings in Every Major Sector)
“It is not the right workers our labor market is lacking, it is work.”
EPI notes that while there have been recent claims that the construction industry is facing worker shortages, data show the opposite. Unemployed construction workers outnumber job openings in construction by nearly 12:1. In every major industry, including manufacturing and transportation that is within the purview of AutoInformed, work is missing, not the supply of the right workers.
“It is not the right workers our labor market is lacking, it is work,” says Shierholz. “Further, while there may be some construction firms in some places who cannot find the workers they need, the data show that this is in no way a prevalent phenomenon.”
Hires increased in April by 200,000 to 4.4 million, but this was just a partial reversal of a drop in March. Hires are no higher than they were last spring and remain nearly 15% below their average 2007 level.
Layoffs held steady in April (-33,000), and are not currently the primary concern in the labor market, having been at pre-recession levels since early 2011 (~1.7 million layoffs per month). However, given the lack of hiring, the consequences for workers being laid off are far worse now than before the Great Recession began since workers are far less likely to find a new job within a reasonable time, particularly one that pays as much as the job they lost, according to EPI.
Voluntary quits increased by 152,000 in April. More voluntary quits should be good news in the labor market, since it means workers are seeing stronger outside job opportunities. However, April’s increase was just a partial reversal of a drop in March. Voluntary quits are still depressed, at -22% their 2007 level.
In April, the number of job seekers, falling by 83,000 from March, stood at 11.7 million (unemployment data from the Current Population Survey is here). However, given the drop in job openings, the “job-seekers ratio,” or unemployed workers to job openings, increased in April to 3.1:1 from a revised 3.0:1 in March.
EPI is a non-profit, non-partisan think tank created in 1986 to “broaden discussions” about economic policy and the needs of low- and middle-income workers. The majority of its funding (about 53%) is foundation grants, while another 29% comes from labor unions. EPI also receives support from individuals, corporations, and other organizations.
