Economic Indicators | Economic Growth

For four out of five unemployed workers, there are no jobs

This morning the Bureau of Labor Statistics released the June report from the Job Openings and Labor Turnover Survey (JOLTS), showing that job openings held roughly steady in June (declining by 2,000), while downward revisions to earlier data reveal that there were 267,000 fewer jobs openings in May than previously reported. 

The total number of job openings in June was 2.9 million, while Current Population Survey data for that month shows that the total number of unemployed workers was 14.6 million. This means that the ratio of unemployed workers to job openings was 5.0-to-1, a slight improvement from the revised May ratio of 5.1-to-1. Importantly, this ratio does not measure the number of applicants for each job.  There may be throngs of applicants for every job posting, since job seekers apply for multiple jobs. The 5-to-1 ratio means that there is literally only one job opening for every five unemployed workers (that is, for every four out of five unemployed workers there simply are no jobs).

The ratio is significantly improved from its peak last November of 6.2-to-1, but there remains a severe shortage of jobs. The ratio of unemployed per job opening is still far higher than at the worst point in the last recession, when its maximum was 2.8 unemployed workers per job opening. In 2007, before the recession started, the ratio averaged 1.5-to-1. 

With so many unemployed workers per available job, people who find themselves out of work can be expected to remain unemployed for extremely long periods. In June, nearly half (45.5%) of this country’s unemployed workers had been jobless for over six months, nearly 20 percentage points above the high of all post-war recessions, which was 26.0%, set in the summer of 1983. 

Furthermore, when calculating the ratio of unemployed-to-job-openings, if we were to include not just the 14.6 million officially unemployed workers, but also the 2.5 million “marginally attached” workers (jobless workers who want a job, are available for work, have looked for work in the last year but have given up actively seeking work and are therefore not counted as officially unemployed), the ratio would be 5.8-to-1.

In June there were 11.7 million more officially unemployed workers than there were job openings. The employment report released on August 6th showed very slow growth in July – barring changes in temporary Census employment, the labor market added only 12,000 jobs. This rate of growth is nowhere near what is needed to bring the unemployment rate down.  It is time for the government to do substantially more to create jobs so that the backlog of unemployed workers in this country can get back to work.