If you think that the job market remains tough despite all the talk about fewer people getting laid off, you’re right.
EconomicPic has a graph to take the wind out of your sails, whether you’re looking for a job or not.
The graph shows number of people looking for a job divided by the number of available jobs over time.
The line starts uphill about the middle of 2007. Layoffs soon grew to epic scope and scale.
The latest job report shows that the rate of layoffs has fallen by an order of magnitude. That’s good, but not good enough to force the ratio down.
With a ratio, if the number on top gets smaller and the number on bottom remains unchanged, then the ratio gets smaller.
For example, if you go from 5,000 job seekers per 100 job openings (yielding a ratio of 50:1, or 50 job seekers for every job opening) to 500 job seekers per 100 job openings (yielding a ration of 5:1, or 5 job seekers for every job opening), the ratio gets smaller (50 shrinks to 5).
Despite fewer job losses, the graph doesn’t show a falling line.
What hasn’t that line headed south?
Because the number on the bottom — job openings — has grown smaller.
If you go from 5,000 job seekers to 500 job seekers while the number of job openings goes from 100 to 10, the ratio remains the same: 5,000:100 = 500:10 = 50:1.
The job market is “less bad” because fewer people are being laid off.
The job market is not better because fewer companies are hiring.
Another thing to keep in mind when looking at the graph is that this ratio lumps jobs and job openings together as if anybody looking for a job could fill any of the available job openings. Obviously, that is not true. The mismatch between the skill set of job seekers and job openings keeps people out-of-work longer, but it’s hard to capture in a simple line graph.
Something else not in the graph: people who have left the job market for one reason or another. No one has a handle on estimating how fast these folks will return once the economy rights itself.
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- Job Search Cartoon (wordsellinc.com)
- Competition for Positions Intensifies as Job Openings Decline (blogs.wsj.com)
- Unemployment Claims Update (seekingalpha.com)
- US employers slash 85,000 jobs in December (theregister.co.uk)
Tags: Add new tag, Business, Business and Economy, employment, Labour economics, Layoff
