Economists pay close attention to the Job Openings and Labor Turnover Summary from the U.S. Bureau of Labor Statistics. The so-called JOLTS report gives the clearest indication of how many job-seekers are chasing the available positions. The August report came out this morning, and shows that for the first time in five years the ratio is below 3 to 1. It’s not much of an improvement, but 2.9 people are seeking every available job.
According to labor economist Heidi Shierholz of the Economic Policy Institute, the August numbers overstate the improvement because at least 5 million have dropped out of the workforce because of the weak economy. “These “missing workers” are thus not counted as unemployed, but many will become job seekers when a robust jobs recovery finally begins, so job openings will be needed for them, too.”
Not only that, but the ratio is nearly as high as the worst month of the 2001 recession. And no sector has as many or more openings as unemployed workers. “There are between 1.3 and 9.8 times as many unemployed workers as job openings in every industry.”
JOLTS gives us a sense of “voluntary separations” — people leaving their jobs to take another, possibly better, opportunity. This is part of the natural churn in the labor market. In the two years before the recession an average 5.3 million people being hired every month on average, while 5.1 million were either leaving their jobs or being fired. Three million of those were voluntary.
That number plunged during and after the panic as people were either laid off or clung to their current jobs. In August, it improved to 2.4 million from the recession trough of 1 million, but it’s still weak.
Another report gives insight into how continuing federal austerity is contributing to the jobs crisis. The September jobs report showed 2,723,000 working for the federal government. That’s the lowest number since the summer of 1966, when the federal government employed 2,721,000.
Floyd Norris of the New York Times has a fascinating story on this here.”Now, the federal government employs exactly 2 percent of the people with jobs in this country,” he writes. “In 1966, the figure was more than twice that, 4.3 percent.”
It’s worth noting that Ronald Reagan engaged in aggressive federal hiring to juice the recovery from the 1981 recession. That downturn was the worst since the Depression — until the Great Recession. Barack Obama and congressional Republicans have followed a different, destructive, playbook.
Also, in 1966 the United States population was barely 200 million; last year it was 314 million.
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Today’s Econ Haiku:
Icahn wants a bite
He is shaking Apple’s tree