Former President Bill Clinton recently provided fuel to the misguided claim of structural unemployment when he claimed that employers are having a hard time filling job openings because the unemployed workers are inadequately skilled for the available jobs. Speaking during a televised interview, Clinton noted that, “We are coming out of a recession but job openings are going up twice as fast as new hires….People don’t have the job skills for the jobs that are open.”
The data, however, tell a different story: that hiring has actually outpaced job openings. The Chart shows that there have been roughly 53 million people hired into the private sector in the 14 months starting in June 2009, the official beginning of the recovery, but only 32.7 million job openings over the same period.
The fact that private employers hired 63% more people than the number of openings they had indicates that they have not had trouble finding workers with adequate skills. In fact, the ratio of hires to job openings has been higher during the current recovery than at any time during the prior recovery of the early 2000s. It is not the skills of the workforce that limit our ability to reduce unemployment, but the limited number of job openings due to a shortfall in consumer and business demand for goods and services.
How can there be more new hires than new job openings? The openings are measured at the end of each month while the number of new hires reflects hires made throughout the month. This means that many jobs open and are filled within the same month and are not included in the count of new job openings. Still, these data show that there is not a backlog of job openings that are going unfilled.
For a more detailed explanation of why the current unemployment crisis is not a structural problem, see our recent paper, Reasons for Skepticism about Structural Unemployment.