Why the jobs are going unfilled

All over Google, there are stories of ‘millions of job openings going unfilled,’ often attributed to unemployment benefits and other purported disincentives for work. My thoughts on the issue:

1 A job opening does not imply that said company is in urgent need of labor, but rather it is more like an audition process in which a company may have a few openings and then screen hundreds of applicants for any that meet their stringent screening requirements and won’t balk at the low pay and demanding hours. It may be cheaper and worthwhile to put up a ‘help wanted’ sign than to pay for an ad on Linked In, the newspaper, or Craigslist (that redirects to a form to submit a resume, which may be automatically screened), even if it means the quality of applicants may be lower because there is no such form and each candidate much be screened individually.

Seeing a ‘help wanted’ sign often belies how many people apply for that job, which is why even if the interview goes well, the odds of being hired is still low. McDonald’s, for example, during a 2011 ‘hiring day,’ got 50,000 application for 3,500 spots.

2. In spite of ‘lots of job openings’ it is not like it is easy for people who fail to meet such screening requirements to find work. On Reddit and elsewhere, it is not uncommon to read stories of people who are qualified but unable to find work regardless how low the unemployment rate is or how many jobs are unfilled.

3. If companies what those positions to be filled, they can start by lowering screening requirements (such as drug tests, req. a 4-year degree in order to sort papers, background checks, long interviews, etc.). It is understandable why companies have so much screening, but more screening logically means it will take longer to fill spots. Unless you are like Google or Facebook, you cannot expect to have an endless stream of eminently qualified applicants at your whim.

4. Even in boom times, there will always be a lot of unfilled openings. Full employment is neither possible nor desirable. A strong economy may mean that job seekers are less inclined to settle for poor jobs.

5. The trend towards a post-scarcity economy means that a smaller percentage of the U.S population will need to work, owing to a combination of social programs, but also, the immense growth of private sector wealth. The post-2009 bull market is the biggest ever in terms of absolute and inflation-adjusted gains and duration, aided by permanently low interest rates. Companies like Google, Facebook, Apple, Microsoft, Amazon, etc. are worth trillions of dollars, and such wealth is flowing down, and will continue to trickle down, to the general population, as wealthy investors and employees bequeath and share their wealth to family and friends, and then those individuals share some of that wealth to their friends and family, etc. There are enough people becoming wealthy with tech and finance jobs and asset appreciation, that the number of degrees of separation between a billionaire or multi-millionaire, and an ordinary person, is shrinking. If you know someone or your friend knows someone who is a billionaire, such as with Google, Tesla, or Microsoft stock, and you are gifted just a tiny , tiny fraction of that money, either through an allowance or lump payment, that’s enough to set you for life. It’s already happening: over the next few decades, boomers will bequeath $30 trillion of wealth to their millennial and gen-x children.

2 comments

  1. I’ll be damned. We can comment now.

    Been a long time reader.

    Your site is one of the select few that I frequent for insights on the economy and investing.

    Love your work.

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