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Tuesday, January 11, 2011

Evidence mount low number of job openings are holding down wages, depressing economy

MIAMI - NOVEMBER 20:  Wences Aguirre (R), who ...Image by Getty Images
via @daylife
 Job seekers on an average are
taking more 27 or more weeks
to find employment two years
after the 2007 Recession

For unemployed job seekers still experiencing difficulty in finding employment mounting evidence exist that employment openings are still low, nearly three years after the recession of late 2007.

In November 2010, the number of job openings available actually dipped, providing the latest indication that employers are hesitant to hire new workers.

Employers advertised 3.25 million jobs that month, which was a drop of about 80,000 from October, the Labor Department JOLTS report noted on January 11th. The openings had previously reached a two-year high in October, with holiday season temporary hiring included.

There are at least 4.6 unemployed workers per job opening, on average in November 2010, versus   jobs available. This figure was .1 percent worse than the previous month's 4.5 ratio, the report cited.

Heavily competition for employment openings among job seekers, hold an abundant advantage for employers. Recent reports have alluded to job openings increasing in 2011. In turn, with the large numbers of unemployed job seekers available, employers have engaged in a ‘pick of the litter’ process with job applicants, while holding down wages at the same time.

Another advantage for employers have in the current job market situation is that they can slowly fill any job openings available. Evidence also exists that this tactic is being used, with the average unemployed job seeker taking between 27 weeks to find a new employment opportunity, according to a January 7th Bureau of Labor Statistics (BLS) report.

Employment openings have increased by 900,000, or 39 percent, since the recession ended in June 2009. But, monthly hiring has risen only 9 percent to 4.2 million, in the same period.

"It is disappointing that 17 months into the recovery, the hires rate still remained at depressed levels," said Henry Mo, an economist at Credit Suisse.

Economists do not agree on the reasons for the gap. Some argue that it reflects a "skills mismatch," where the unemployed the updated skills necessary today’s available jobs. Others cite the housing slump, which makes it harder for those out of work to sell their homes and move to locations where more jobs are available.

Regardless job openings remain far below the 4.4 million that were advertised in December 2007, when the recession began.

The figures come after the BLS issued a employment report on January 7th that employers added 103,000 jobs in December. Half of the drop in the reported 9.4 percent down from 9.8 percent in November 2010 was due to individuals giving up on their job searches.

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1 comment :

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