Labor Market Weakness Is Still not due to Workers Lacking the Right Skills
The figure below shows the number of unemployed workers and the number of job openings by industry. This figure is useful for diagnosing what’s behind our sustained high unemployment. If our current elevated unemployment were due to skills shortages or mismatches, we would expect to find some sectors where there are more unemployed workers than job openings, and some where there are more job openings than unemployed workers. What we find, however, is that unemployed workers dramatically outnumber job openings across the board. There are between 1.1 and 6.5 times as many unemployed workers as job openings in every industry. In other words, even in the industry with the most favorable ratio of unemployed workers to job openings (health care and social assistance), there are still about 10 percent more unemployed workers than job openings. This demonstrates that the main problem in the labor market is a broad-based lack of demand for workers—not, as is often claimed, available workers lacking the skills needed for the sectors with job openings.
Unemployed and job openings, by industry (in millions)
|Professional and business services||1.151667||0.792083|
|Health care and social assistance||0.719667||0.665667|
|Accommodation and food services||0.975167||0.544|
|Finance and insurance||0.27225||0.216333|
|Durable goods manufacturing||0.518667||0.174417|
|Transportation, warehousing, and utilities||0.38375||0.157833|
|Nondurable goods manufacturing||0.343667||0.10575|
|Real estate and rental and leasing||0.126||0.052|
|Arts, entertainment, and recreation||0.226167||0.074583|
|Mining and logging||0.05425||0.026833|
Note: Because the data are not seasonally adjusted, these are 12-month averages, September 2013–August 2014.
Source: EPI analysis of data from the Job Openings and Labor Turnover Survey and the Current Population Survey