Job Openings are Up, But Landings are Stubbornly Slow
Last week’s jobs report showed the U.S. economy adding 517,000 jobs in January – more than double Wall Street’s predictions. With 11 million openings and just 5.7 million job seekers, the labor shortage remains a significant challenge for many. At nearly two jobs per person looking for work, the labor market continues to be one of the best for job seekers in decades.
In January 2023, the U.S. had 73% more jobs per job seeker than pre-pandemic January 2020. However, workers are landing jobs only 6% faster than before the pandemic. Also puzzling is that the average length of an unemployment claim is still over three months (14.2 weeks) nationwide. These long unemployment periods are not only difficult for employees, but are costly for reimbursing employers, who are charged an average of $5,800 for each claim.
There has been much speculation about why it is taking so long for some people to find employment. It is possible that some workers are still stressed out from the pandemic and taking a breather when they’re laid off. For many, the number of jobs has made it less scary to be unemployed. Feeling more secure, they are choosing their next steps more carefully and slowly. After what’s been called the Great Mid-Life Crisis some think job seekers are looking for more in their next move, and focusing on factors such as meaningful work, appreciation and work-life balance.
For many job seekers, a relatively slow return to work can be costly and is an unlikely choice, given the cost of being without a paycheck. For those receiving unemployment benefits, weekly checks average less than half of their former pay, causing many to dip into savings. To keep the same budget, the average worker spends $6,000 of their savings (or takes on debt). Coupled with inflation of 8.3% in 2022, the impact of lost wages can have a painful impact on personal finances.
There is another factor which appears to be contributing to the current length of unemployment. In recent years, several studies indicated that workers rated themselves at a D+ in navigating the job market. This gap in career literacy appears to be a strong contributor to otherwise inexplicably longer-than-expected unemployment spells. As one laid-off tenured worker said last year when the ratio of jobs was just as strong: “My confidence for even finding a new job was zero. I felt really down about what I was worth.” Indeed, studies suggest that job loss continues to be one of the top stressors in life.
Stubbornly long unemployment not only hurts workers and their former employers, but it also contributes to labor shortages and inflation. As workers continue to struggle to land a job for nearly five months, maybe it’s time to be more creative about helping our unemployed get back on their feet faster and avoid the many poverties of unemployment.
501 offers members complimentary reemployment coaching packages, through NextJob, to help your laid off employees land jobs much more quickly. Contact us for more information on job search packages.
(Image by Bublikhaus from Freepik)
