New Record 6.6 Million US Jobs Remain Unfilled

If you’re looking for a job right now, this may be about as good as it gets. In March, employers advertised apprx. 6.6 million open jobs, a new record high. At the same time, there were apprx. 6.6 million unemployed Americans looking for work.

That’s a historical anomaly. Typically, there are far more unemployed people than advertised job openings – often twice as many or more. Back in July 2009, just after the Great Recession, there were over 6.6 unemployed people, on average, for each open job. With that ratio now at essentially 1 to 1, the job market is tilting in favor of job-seekers rather than employers.

New job openings in March rose by a solid 7.8%, up from 6.1 million in February. Openings jumped in professional and business services, which added 112,000 positions, as well as construction with 68,000 positions and transportation, warehousing and utilities, which reported 37,000 new positions.

The record high number of unfilled job openings stems in part from the weak wage gains in recent years. Average hourly pay increased just 2.6% over the 12 months ended April, even as the unemployment rate dropped to a 17-year low of 3.9% last month.

That should force employers to push up pay, and most economists expect wage gains will accelerate in the coming months. That’s because it takes more effort – and expense – to find workers when the jobless rate is low, and employers typically have to pay more to lure workers into jobs.

In fact, there’s been a noticeable increase in hiring bonuses with some blue-collar jobs like trucking, railroad and other fields paying up to $25,000 upfront. Those are one-time payments, not true pay raises.

So, the United States now has a job opening for every unemployed person in the country, a sign of just how far the nation has turned around from the recession that cost so many Americans their jobs nearly a decade ago.

On another front, there will always be people who quit their jobs and take time to find new employment. More than three million people voluntarily left their jobs in March, and the number of people quitting their jobs has increased 6.4% in the past year. That’s actually a sign of a strong economy. Workers typically quit only when they have other jobs lined up, or are confident they can find one.

More and more business executives now say their top worry is that they can’t find enough workers. The unemployment rate is at the lowest level in nearly two decades, and the jobless rate for African Americans and Hispanic Americans is at an all-time low.

Half of small business owners say they can’t find enough qualified workers for open positions, according to a National Federation of Independent Business survey in late April.

Companies are revising their hiring practices to ensure that they do not rule out any potentially good workers, especially those who might not have a college degree or people who have minor criminal histories and/or have served time in jail. It is widely reported that more and more businesses are dropping marijuana from drug testing requirements as it excludes too many prospective workers.

In a strong labor market such as we have now, everyone who wants a job should be able to get one, but that’s not what typically happens, even in good economic times. There is always somewhat of a mismatch between job seekers and job openings. The people looking for work don’t always have the right skills, or live in a place where there are not a lot of opportunities to get hired. Relocating to where jobs are plentiful is usually very expensive.

In Washington, the Trump administration is pushing companies to add more apprenticeships, and in states such as Rhode Island, Maryland and Tennessee, state lawmakers have made community college free to make it easier for workers to beef-up their skills and résumés.

One goal of President Trump’s tax cuts is to get companies to invest more in new technologies and factories in the hope of lifting productivity and, in turn, wages. Productivity is a measure of how much output each worker does per hour. When that rises, wages typically follow. It’s too early to tell whether that’s happening, but I suspect it will.

The bottom line is that it’s likely the United States will soon be in a situation where there are more job openings than job seekers. It’s actually a good problem to have.

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