Still No Sign of a Skills Mismatch—Unemployment is Elevated Across the Board
One of the recurring myths following the Great Recession has been that recovery in the labor market has lagged because workers don’t have the right skills. The figure below, which shows the number of unemployed workers and the number of job openings in November by industry, is a useful way to examine this idea. If today’s labor market woes were the result of skills shortages or mismatches, we would expect to see some sectors where there are more unemployed workers than job openings and others where there are more job openings than unemployed workers. What we find, however, is that there are more unemployed workers than jobs openings across the board.
Some sectors have been closing the gap faster than others. Health care and social assistance, which has been consistently adding jobs throughout the business cycle, has a ratio quickly approaching 1. Wholesale trade is also moving towards a ratio of 1. And on the other end of the spectrum, there are 6.2 unemployed construction workers for every job opening. Arts, entertainment, and recreation has the second highest ratio, at 3.2-to-1.
Taken as a whole, these numbers demonstrate that the main problem in the labor market is a broad-based lack of demand for workers—not available workers lacking the skills needed for the sectors with job openings.
Unemployed and job openings, by industry (in millions)
|Professional and business services||1.1029||0.8648|
|Health care and social assistance||0.7116||0.7004|
|Accommodation and food services||0.9649||0.5807|
|Finance and insurance||0.2636||0.2311|
|Durable goods manufacturing||0.4713||0.1775|
|Transportation, warehousing, and utilities||0.3663||0.1645|
|Nondurable goods manufacturing||0.3048||0.1088|
|Real estate and rental and leasing||0.1148||0.0566|
|Arts, entertainment, and recreation||0.2175||0.0685|
|Mining and logging||0.0518||0.0293|
Note: Because the data are not seasonally adjusted, these are 12-month averages, December 2013–November 2014.
Source: EPI analysis of data from the Job Openings and Labor Turnover Survey and the Current Population Survey