Sunday 24th of January 2021

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Tough Competition for Few Job Openings

Although the economic news seems to be getting better every day, there’s still no celebration in one sector: employment. While some economists say it’s traditionally the last segment to recover in a bad economy, the jobless situation actually seems to be getting worse than anyone could have imagined.

With U.S. businesses remaining cautious about their financial outlooks, they seem to have put the brakes on hiring. In addition, they are waiting to see how much pending health care reforms could end up affecting their bottom lines. As a result, the combination has brought about a 9.7 percent nationwide unemployment rate.

With the recession dragging on, there is little precedent for how long the situation can last. In 2001, the year of the last recession, the ratio of unemployed workers to the number of available full-time jobs was 2 to 1. At the start of 2009, according to the U.S. Labor Department, that same ratio grew to 4 to 1. Now it is 6 to 1 – the worst since the government started monitoring the number of open positions in 2000. There were 14.5 million people unemployed compared to 2.4 million open jobs in July, the most recent month in which totals are available.

There is no region of the United States that has been untouched by the situation. From the time the recession started in December 2007 through July, job openings fell 45 percent in the West and the South, 36 percent in the Midwest and 23 percent in the Northeast, and nearly every industry was affected.

Since the start of this year, open jobs plummeted 47 percent in manufacturing, 37 percent in construction and 22 percent in retail. Available positions even fell 21 percent in education and health services, the faster-growing segments in which many jobless have trained for new careers. Stimulus money hasn’t even helped government job availability, with a 17 percent drop reported.

Forecasts don’t offer much hope. Two surveys of newspaper help-wanted ads and employers’ consideration of adding to their payrolls reflected the lowest levels ever reported. The hiring of temporary workers can be a forerunner to full-time hiring but job-placement firms say their customers still aren’t looking for large numbers from their available workforces.

When hiring does resume, the pace could still be slow. In fact, many companies are expecting more work to be completed by their existing workers, which could become the norm. And that doesn’t mean those employees can expect to get overtime compensation for getting all of that extra work done.

Smaller payrolls actually could dampen the recovery. Companies grew accustomed to consumers tapping into swollen home equity accounts and growing stock portfolios to fuel lifestyles of living above their means. The new habit is saving money and that has many firms worried.