Record 6.3 unemployed for every job opening, government says

WASHINGTON — The number of job seekers competing for each opening has reached the highest point since the recession began, according to government data released Friday.

About 6.3 unemployed U.S. workers are competing, on average, for each job opening, a Labor Department report shows. That's the most since the department began tracking job openings nine years ago, and up from only 1.7 workers when the recession began in December 2007.

The employment crisis is expected to worsen as companies stay reluctant to hire. Many economists expect a jobless recovery, putting pressure on President Barack Obama and congressional Democrats to stimulate job creation.

Employers have cut a net 7.2 million jobs during the downturn. While layoffs are slowing, Friday's report shows the other critical piece of a labor market recovery — hiring — has yet to begin.

"Fewer people are facing job loss," said Heidi Shierholz, an economist at Economic Policy Institute in Washington, "but once you have lost your job, you are in serious trouble."

The department's job openings and labor turnover survey found fewer than 2.4 million openings in August, the latest data available. That may seem like a lot of jobs, but it's down from 3.7 million a year ago and half its peak in June 2007. It's also the lowest tally on nine years of government records.

At the same time, the number of unemployed Americans doubled from the start of the recession to 14.9 million in August, and economists fear the job market will take years to recover.

Shierholz said the economy faces a "jobs gap" of almost 10 million — the 7.2 million jobs lost plus the roughly 125,000 per month that would have been needed since the recession began just to keep up with population growth.

To close that gap and get back to pre-recession levels in two years would require more than 500,000 new jobs per month, a pace of job creation that hasn't been seen since 1950-51, Shierholz said.

Economists offer several reasons why companies aren't hiring. Many employers laid off huge numbers of workers earlier this year but have since found that productivity jumped, enabling them to maintain output.

"For now, many of them are trying to find out how far they can push that," said Nigel Gault, chief U.S. economist for IHS Global Insight.

Many employers also are unsure about whether the economy can continue to grow once the impact of government stimulus fades and aren't likely to hire until that uncertainty eases, Gault said.

Efforts by the administration to reform health care and address climate change also create uncertainty among businesses about whether they'll soon be facing higher costs, according to Steven Davis, an economics professor at the University of Chicago.

"When there's that type of uncertainty in the air, it's a good reason to pull back and wait before making any (hiring) decisions," he said.

Record 6.3 unemployed for every job opening, government says 10/09/09 [Last modified: Friday, October 9, 2009 10:24pm]

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