Record Six Million Unfilled Jobs in US-What's the Problem?
1. Record 6 Million Unfilled Jobs – Yet 6.8 Million Can’t Find Jobs
2. Do We Have a Labor Shortage in the US? In Skilled Labor, Yes
3. Near-Term Labor Shortages Are Actually a Sign of Progress
The US Department of Labor told us in June that there were apprx. 6.0 million open (unfilled) jobs in America, a record high. The Labor Department also told us that there are apprx. 6.8 million unemployed Americans who are actively looking for work.
With those two figures in hand, you might wonder why there is a “jobs” problem at all. You might think that 6 million of the 6.8 million looking for work would snap up those 6 million unfilled jobs. But then you would probably realize that many of the 6 million unfilled jobs are not located where the 6.8 million looking for work are located. That’s part of the problem.
Yet the biggest problem by far is this: Many of the 6.8 million Americans looking for work do not possess the skills required to do most of the 6.0 million unfilled jobs. For a variety of reasons, many jobless Americans lack the skills necessary to do today’s unfilled jobs.
This fact is at the heart of our sluggish economy, and there are no easy answers. That’s what we’ll talk about today.
Record 6 Million Unfilled Jobs – Yet 6.8 Million Can’t Find Jobs
America has more job openings than ever before. There were 6 million unfilled jobs in the United States in April, a record high, according to data released by the US Labor Department in late June. It comes at a time when 6.8 million unemployed Americans are looking for jobs.
With a similar amount of job openings and unemployed workers looking for work, it may make one wonder why those unemployed workers aren’t able to find jobs. This is especially puzzling given that the official unemployment rate is at a 16-year low of 4.3%.
Source: US Department of Labor
Yet a further look into the unemployment data reveals one of the key problems that has increasingly plagued the US labor market in recent years.
First and foremost, job seekers tend to lack the skills in demand by today’s employers. Second, those seeking work are increasingly unwilling (or financially unable) to move to where jobs are available. And third, employers have often unrealistic expectations.
During and after the Great Recession of 2007-2009, employers had the upper hand and could be choosy about who they hired because unemployment was high and openings were scarce. They could raise job application requirements like asking for a college degree, even if the job didn’t necessarily require one.
For example, 65% of recent job postings for secretaries who work for executives (now known as “administrative assistants”) required a college degree. Yet among current executive assistants, only 19% have college degrees, according to a recent Harvard Business School survey. That’s a big gap between expectations and reality.
But most importantly, the US has long struggled with a job skills gap, which is a result of an aging workforce, the rapid pace of automation and a lack of effective job training programs. The sad fact is that most Americans looking for work today do not have the skills they need to fill open jobs in their area.