Think the Job Market Still Stinks? You’re Right

You’ve probably never heard of the federal JOLTS report, but as the Economic Policy Institute pointed out recently, it’s a good measure of the strength of the national jobs market. And the news from the feds Tuesday is not good.

The latest Job Openings and Labor Turnover Survey released Tuesday morning by the Bureau of Labor Statistics shows virtually no change over the summer in what is known as the “hires rate,” the percentage of jobs that reflect people hired for new positions or to replace departing workers. As the EPI reported earlier this summer, the rate of new jobs has been sluggish, at best:

The JOLTS data are a regular reminder that there is always a great deal of “churn” in the labor market.… Over the last year, an average of 4.3 million workers were hired every month and an average of 4.2 million workers either left their jobs voluntarily or were laid off every month. These hires and separations numbers, however, are currently very low; when the labor market is stronger, there is much more churn. For example, in 2006 and 2007, there were 5.3 million people being hired and 5.1 million people separating from their jobs (i.e., leaving their jobs or being fired) each month on average.

The reason the rate is so low? People are afraid to quit their jobs, and employed people looking for greener pastures are having trouble finding them. So the churn stalls.

In 2006 and 2007, nearly 3 million workers voluntarily quit their jobs each month. That dropped to a low of 1.6 million in September 2009. It has since increased somewhat, but is still extremely low. In June, 2.2 million workers voluntarily quit their jobs, a decline of 73,000 from May. Because leaving a job for a better opportunity can be an important way for workers to advance, this persistent depressed rate of voluntary quits represents millions of lost opportunities.

The new number for July: 2.3 million quit their jobs, a slight uptick but still well below the pre-recession rates. According to EPI, another section of the JOLTS report reveals a frustrating truth. “In today’s economy, unemployed workers far outnumber job openings in every major sector. … This demonstrates that the main problem in the labor market is a broad-based lack of demand for workers — not, as is often claimed, available workers lacking the skills needed for the sectors with job openings.”

Corporate profits, on the other hand, are at an all-time high, as are the levels of cash that corporations are hoarding in fear of another recession. Of course, if they spent some of that cash putting people back to work … yeah, that’s just crazy talk. Never mind.

—Posted by Scott Martelle