On the last day of April, there were 4.5 million job openings, according to today’s release from the Bureau of Labor Statistics. That’s 0.3 million job openings more than in March. Hires, on the other hand, were practically flat at 4.7 million. What’s going on here?
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At FiveThirtyEight, Ben Casselman calls this “a persistent pattern in the recovery.”
“One reason for the faster rebound in openings is that they fell further during the recession; companies pulled back on posting jobs even more than they did on hiring. But that isn’t the whole story,” he writes. “The ratio of hires to openings, which spiked during the recession, has fallen steadily through the recovery and is now below normal levels. That suggests companies aren’t filling available jobs at their usual pace.”
It’s less clear why companies are slow to hire, Casselman says. Is it, as some employers suggest, because there aren’t enough workers with the skills necessary to do the jobs? Or is it that companies aren’t paying enough for skilled workers?
The PayScale Index showed a 0.5 percent growth in wages for the first quarter of the year, and predicts a 0.8 percent growth for the second, but real wages remain significantly lower than pre-recession levels. (7.7 percent lower, in fact, compared with 2006 wages.)
Another explanation: employers are still waiting for purple squirrels.
“Companies are seeing more demand for their products, so they’re posting job openings, but that demand isn’t yet strong enough for them to fill those positions quickly,” Casselman suggests. “They’re content to wait for the perfect candidate to show up.”
If this theory turns out to be correct, hiring would pick up once that tipping point is reached. Here’s hoping it happens soon.
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