America: land of phantom job openings

November 7, 2014

By Stephanie Rogan

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. 

The vacancies are posted, the workers are there but U.S. employers are hiring at a slower rate. Welcome to America, land of phantom jobs.

At 4.8 million, the nation at the end of August had the most positions available since January 2001, according to the U.S. Bureau of Labor Statistics, which is set to release October employment figures on Friday. Meanwhile, the August hiring rate slipped to 3.3 percent. The biggest gap can be found in low-wage, low-skill jobs. The comparatively high rate of unemployment among less educated workers – 8.4 percent for high-school dropouts compared to 2.9 percent for college graduates – suggests companies are in no real hurry to add personnel.

Politicians and employers are quick to blame a skills deficit. The numbers don’t bear that out. Since 2007, the widening gulf between job openings and hiring has come primarily from the retail, hotel and food service industries, where no more than a high-school diploma is generally needed. And yet those candidates are almost twice as likely to be unemployed as their university-educated counterparts.

Stagnant wages raise further doubts. If employers were really struggling to fill openings, they’d presumably be willing to pay more. And yet adjusted for inflation, high-school grads have actually seen their wages fall over the past decade.

What’s more, there’s evidence that an increasing number of university graduates are taking jobs historically reserved for lesser-educated people. A Federal Reserve Bank of New York study found that roughly 44 percent of recent university grads are in a job that does not demand a bachelor’s degree.

If there are so many workers, including overqualified ones, to fill the void, why isn’t there more hiring? Part of the answer probably rests with the mechanics of the process, which have evolved significantly. Advertising a job is now practically free. Under government criteria, even a Craigslist post counts as active recruiting. To be considered open, jobs must be ready to start within 30 days, but that doesn’t mean employers must hire in that timeframe.

Indeed, efforts to grow workforces are well below the levels of a decade ago, according to the Dice-DFH Recruiting Intensity Index. Postings might linger in cyberspace as choosy companies wait for economic conditions to improve or for the perfect candidate to turn up. Unemployment benefits may be perceived to exceed the value of the jobs available. Either way, illusory openings won’t do much to help the economy.


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“Recent” college graduates are those between 21 and 27, a cohort chosen to capture those who graduated five years or less before. Tellingly, according to nt_issues/ci20-1.pdf, a third of all graduates are under-employed.

Posted by Zaichik | Report as abusive

Employers don’t want to hire Americans. Posting jobs and rejecting every American candidate is the first step in the procedure that companies goes through to get visas to obtain workers who will work for less. That is why wages keep stagnating.

Posted by Poster500 | Report as abusive

Company’s will delay hiring in order to squeeze an extra $$$ to take to the bottom line.
Problem is this is resulting in resentment amongst employees as they get way overloaded, further resulting in a situation where employees have little or no loyalty to their current employer any more.
Company’s don’t seem to care though.
As for educated graduates taking jobs at lower levels, well that’s because we’ve been losing for years the good paying jobs, & the jobs being added the past number of years are the low wage unskilled ones.
Graduates need income to pay bills, so they grab whatever they can, & they’re constantly looking for another job so they can jump to where the $$ are.

Posted by Bobo9 | Report as abusive

1 job + 4 recruiters = 5 jobs posted but only 1 job available.

Posted by Wry | Report as abusive

AGREED. nobody is really hiring. they’re just posting but you never hear feedback and the same listing reappears a couple days later. I wonder if they receive some sort of subsidy or tax benefits for contributing to positive employment numbers

Posted by anon88 | Report as abusive

The same issue is in Germany. Plenty of job openings on various job portals, but when I apply, the company fails to reply. So I guess this is a developed world problem. Maybe companies that fail to hire within 30-45 days should be filtered out of these portals, making them much more accountable.

Posted by random_oracle | Report as abusive

Not only was I a Phantom employee, I also has a phantom paycheck!

Posted by february2 | Report as abusive

But Darrell Issa we should open the flood gates so that foreign degree holders can stay in the US and work.

More H1B’s for everybody!

Posted by ih8npr | Report as abusive

The folks who I really feel sorry for are the Vets who after serving and protecting our country’s interests for years, come home needing a job, only to find that they’ve been taken by illegal aliens. They are victims of a system where the Federal government is in bed with the Corporations who could care less about the Vets, but love those illegal aliens, who work cheap. To paraphrase Shakespeare, the first thing we have to do is kill the politicians.

Posted by p19 | Report as abusive

In Germany we’ve these fake openings since decades. It makes the company look better, if they offer jobs. ‘Bla Bla recruits again!’ in huge letters in the local newspaper is just another kind of advertising, which makes customers believe the company has a good time and is doing good for the community.

Posted by seafloor | Report as abusive

Any job that can be outsourced to save money will. Americans are competing with lower paid employees not only in manufacturing but professional jobs over seas and there is no end in sight. Young people need to go into careers were they cannot be outsourced. The loyalty now is only to the buck, welcome to the world economy.

Posted by cheeze | Report as abusive