Jobs to Fill, Nobody to Fill Them?

by Jonathan Cohn | August 9, 2010

One of todays' economic surprises is the mismatch between the number of people without jobs and the number of jobs that are available. Typically the two track each other closely. But lately they have diverged, leaving economists to theorize on why.

One explanation, discussed in this space last week, is that long-term unemployment has become a trap. Once people are out of work for a while, they have a harder time getting a new job: They might have trouble conducting the job search, because they've lost their home and phone service. Employers might conclude that their long-term unemployment is the result of some defect that makes them less desirable employees. And so on.

But there's obviously more to this story. And an article in today's Wall Street Journal introduces a new wrinkle: Employers say they can't find enough skilled workers to fill skilled positions. This has Kevin Drum puzzled:

Even if there's a shortage of high-skill workers, that's a long-term problem, not something caused by the recession. In fact, as the chart accompanying the story shows, the number of high-skill job openings has declined since 2008. At the very least, then, companies should be having an easier time--slightly easier, anyway--filling their open positions unless either (a) they've lowered their wages or (b) high-skill workers are literally retiring en masse. Whatever it is, something doesn't quite add up here.

So what gives? Gary Burtless, the Brookings economist who specializes in labor markets, e-mails with a theory:

It is always the case, in my experience, that employers say they "can't get good help these days." I wouldn't be surprised if in March 1933 (unemployment rate: 25 percent) employers complained it was hard to get good help. Especially when employers complain about the difficulty of finding workers with specialized skills, you've got to ask yourself, how did workers accumulate those specialized skills in the good old days? The answer, usually, is that some employer invested in training the worker. Often the training cannot be obtained in 4-year or community colleges or in for-profit technical schools.  It is training that employers and workers jointly invest in on the job.
Because we have 9.5 percent unemployment, employers may be under the impression trained workers are available for a song, but the fact remains training will be required for many job vacancies, and employers will have to make an investment in training if they want their workers to posess the needed skills.  A high unemployment rate changes the balance of power: workers will have to pay for more of the training; firms will pay for less of it.  But it is unrealistic to expect workers to pay for 100 percent of the training required for a very specialized job.  The only place the training may have a payoff is in the job vacancy being offered by the firm.  Why should a worker invest hundreds or thousands of dollars in specialized training when the only position where it will be used is in a position being offered by one firm or possibly in just three or four firms?
Even though employers complain there aren't enough trained applicants, my strong suspicion is that there are plenty of qualified applicants available who are willing to be trained for the job openings that are currently available ... if employers help workers invest in the required training.  One sometimes wonders how the U.S. managed to fight and win World War II (1943 unemployment rate:  2 percent) when there were so few trained workers available to fill millions of new and specialized jobs.

Again, that's clearly not the whole story. But I bet it's one part.

Source URL: http://www.newrepublic.com//blog/jonathan-cohn/76894/jobs-fill-nobody-fill-them