How’s that stimulus working? Joe Biden says Porkulus has exceeded his wildest expectations, but for those looking for work, they face the highest amount of competition for open jobs since the Bureau of Labor Statistics started analyzing it in 2000. The applicant-to-opening ratio has skyrocketed, the New York Times reports — even as they miss an important part of the story:
Despite signs that the economy has resumed growing, unemployed Americans now confront a job market that is bleaker than ever in the current recession, and employment prospects are still getting worse.
Job seekers now outnumber openings six to one, the worst ratio since the government began tracking open positions in 2000. According to the Labor Department’s latest numbers, from July, only 2.4 million full-time permanent jobs were open, with 14.5 million people officially unemployed.
And even though the pace of layoffs is slowing, many companies remain anxious about growth prospects in the months ahead, making them reluctant to add to their payrolls.
The pace of layoffs is not slowing. In fact, mass layoffs jumped almost 25% from July to August, according to the same BLS where the Times got these numbers. How could the Times and reporter Peter Goodman call that “slowing”? Layoffs have accelerated after dropping slightly in the early summer, and since initial unemployment claims continue to average 553,000 per week, layoffs and terminations have not slowed at all.
Shouldn’t their first clue have been the jump from 9.4% unemployment in July to 9.7% in August?
Otherwise, the reporting from the Times seems to capture the essence of the problem. New job openings are not being created, no matter what Biden says about Porkulus. The decline of openings continues in 2009, as this graphic shows, creating a far more hostile environment for job seekers than any time during the last ten years:
Recall how Democrats described the 2002-3 recession and the aftermath: the jobless recovery. Even at its worst, the economy in that period generated 3 million new jobs a year and had a seeker-to-opening ratio of no more than 3:1. This has more than doubled the ratio, and now we have only 2.4 million job openings, and declining.
Not coincidentally, youth unemployment has hit a new post-World War II high as well:
The unemployment rate for young Americans has exploded to 52.2 percent — a post-World War II high, according to the Labor Dept. — meaning millions of Americans are staring at the likelihood that their lifetime earning potential will be diminished and, combined with the predicted slow economic recovery, their transition into productive members of society could be put on hold for an extended period of time.
And worse, without a clear economic recovery plan aimed at creating entry-level jobs, the odds of many of these young adults — aged 16 to 24, excluding students — getting a job and moving out of their parents’ houses are long. Young workers have been among the hardest hit during the current recession — in which a total of 9.5 million jobs have been lost.
That is the consequence of both the recession and the artificial inflation of wages through the mandated increases to the federal minimum wage. The government made entry-level positions costlier for businesses, and so they can offer fewer of them. Those that do get opened will get filled increasingly by experienced workers rather than new entrants into the job market, as businesses limit their risk.
The solution to this would be to return capital to the private markets and to get government out of the social-engineering business, which created the current economic crisis in the first place. Don’t expect to get real solutions from an administration still wallowing in the fantasy of “saved and created jobs.”