Job opportunities are at record levels. Why don’t unemployed Americans fill it?

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More than nine million Americans said in May they wanted jobs and were unable to find them. The companies said they had more than nine million unfilled vacancies, a record number.

As the economy reopens, the process of matching laid-off workers to jobs has proven slow and complex, in contrast to the rapid and decisive layoffs that followed the first phase of the pandemic in early 2020.

The separation helps explain why many companies complain that it is difficult to fill open positions early in the recovery period. It also helps explain why wages are rising so quickly even when the unemployment rate, at 5.9% in June, is well above the pre-pandemic rate of 3.5%. A relatively high unemployment rate indicates an excess supply of labor which in theory should lower wages.

This has implications for policymakers: sand in the wheels of the labor market could cause inflationary pressures to push federal policymakers back from low interest rate policies intended to support growth. On the other hand, in the long run, a slow matching process can have benefits, leaving workers in the jobs they prefer and the economy more efficient.

Several factors are behind this development: many workers have moved during the pandemic and there are no available jobs; Many have changed their preferences, for example continuing to work remotely, after discovering the benefits of living without commuting; The economy itself has transformed, leading to jobs in industries such as warehousing that are not in the places where workers live or fit the skills they possess; Extended unemployment benefits and relief checks, meanwhile, give workers time to be selective in their search for their next job.

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