Problem: 11.5 job openings, 6 million unemployed

May 2022. If you want to get a good explanation for America's economic troubles today, look no further than the following graphic of the gap between jobs open and people looking for work.

Here is the accompanying article:

Job quits and unemployment 4 May 2022.pdf

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The graphic does a more succinct, efficient job of illustrating the problem than the text of the article does, but let's summarize it here:

The number of job openings continues to exceed the number of unemployed people seeking work. In March, there were nearly two job openings for every unemployed person, the Labor Department said. Openings have outpaced the level of unemployed people seeking jobs since last spring. Employers have had difficulty hiring from the limited pool of available workers, and millions of people are expected to remain on the sidelines indefinitely. That has also pushed up wages.

To be clear, there are always job openings and there're always people unemployed. The problem has many elements but let's start with three: (1) how well those unemployed fit the needs of the employers with job openings (as well as how attractive the job is to those unemployed); (2) the incentives people have to leave the labor force or to remain unemployed; and (3) the lack of appropriate skills for the job demands of today's highly digital, empirical, data-driven society. On this third pint, the miserable educational preparation of both high school and many college graduates leaves them with few marketable skills in today's economy and, in the case of the low-skilled college grads, an exaggerated sense of self-worth and entitlement, along with significant college debt. On the second point, in the past two years, the federal government has made it affordable to not work. Along with creating openings that need to be filled, these non-workers consume billions of federal subsidies and, lacking a job, they make no contribution to tax revenues, be they state, federal, Medicare or Social Security taxes. Rather than creating wealth, these non-employed and unemployed people are consuming transferred wealth from taxpayers.

Based purely on speculation, some of this problem may have come from workers over the age of 55 who lost their employment withe the lockdowns and have decided to not re-enter the workforce now, along with those overworked during the two years of lockdowns, mandates and restrictions who have found that now is a good time to "bail," i.e., the Great Resignation.

Employment is just as problematic as job openings. Taking the Covid collapse of employment out of the model and you would have expected 163 million employed Americans in 2022, i.e., the employment recovery has not kept pace with shopping, wages or prices. You'd think that with prices climbing, along with starting wages, that employment would be filling up quickly. But it's not. And there is no more talk of a 'living wage,' a minimum wage -- $15 -- double the national minimum of about $7.50, as firms are offering a market wage above that 'living wage,' while progressive politicians promote a universal basic income, making it even more attractive to not work, even at this higher wage.

The seeming, current 'Great Disconnect' between the American population (about 330 million people), payrolls (about 160 million), job openings (11.5 million), job resignations (more than 10 million in the past six months), and unemployment filings (about 200,000) baffles me, and no economist or politician seems to have a clear understanding and certainly no solution to this "Great Malaise." My next post will review the Pew Center research on the resignations.

And despite the decline in birth rate in the USA, labor growth in the US is still very strong, compared to its global competition, due mostly to migration into the USA and the even greater decline in both rates in these aging competitors.