EPI Study: Business Wrong to Claim Need for More Workers

The Economic Policy Institute’s analysis of recent jobs data undermines the common business complaint that employers are not hiring because they can’t find enough qualified workers. EPI economist Heidi Shierholz argues there are more than enough unemployed workers in all sectors of the current job market to fill jobs in those industries.

Shierholz analyzed the November Job Openings and Labor Turnover Survey released earlier this month by the Bureau of Labor Statistics. She concluded, “These data show that the main problem in today’s labor market is not a lack of the right workers for the jobs that are available; it’s that employers do not have enough work to be done to need to hire more workers.” Nationally there are far more unemployed construction, manufacturing, hospitality, education, health care and retail workers than job openings.

The “job-seekers ratio”—the ratio of unemployed workers to job openings—was 3.3-to-1 in November. That means there are no jobs for more than two out of three unemployed workers. That figure has improved since its peak of 6.7-to-1 in July 2009, but odds remain stacked against job seekers. The highest the ratio ever got during the early 2000s downturn was 2.9-to-1. In a labor market with strong job opportunities, the ratio would be close to 1-to-1.

According to Shierholz, business groups should not claim there is a lack of skilled workers in the sectors with job openings because there is a surplus of workers in all sectors. The EPI analysis supports the long-standing contention by the Center for Immigration Studies that the nation does not need amnesty or more skilled and unskilled guest workers.

In a recent study, CIS’ Steven Camorata concluded, “It is difficult to overstate the size of the pool of potential workers that now exists in the United States. If through enforcement a large fraction of illegal immigrants returned to their home countries rather than being allowed to stay with legal status, there would seem to be an ample supply of idle workers to replace them, particularly workers who have relatively little education. Of course, employers might have to pay more, and offer better benefits and working conditions in order to attract American citizens. But improving the living standards and bargaining power of the least-educated and poorest American workers can be seen as a desirable social outcome. The contention that there is a general labor shortage that has to be satisfied by giving work authorization and/or citizenship to illegal immigrants and increasing the number of immigrants allowed into the country seems entirely inconsistent with the available evidence.”

Others have written about the surplus of workers in various fields. EPI’s Daniel Costa, in commenting on Microsoft’s call for the importation of more foreign workers, wrote, “It is noteworthy that although Microsoft laments its 6,000 unfilled job openings, it laid off at least 5,000 employees during the recession. How many of these job openings are replacing employees who were laid off?” And Harold Salzman from The Urban Institute wrote, “The United States’ education system produces a supply of qualified [science and engineering] graduates in much greater numbers than jobs available.”

Business groups have been pushing Congress to allow more foreign STEM graduates to remain in the U.S. rather than lose them to other countries. But according to Michael Finn of the Oak Ridge Institute for Science and Education, the U.S. already retains 67 percent of foreign PhD graduates, including 72 percent of those in computer science. “(There is) no support for the view that (science and engineering) recipients on temporary visas have had declining stay rates because of difficulty obtaining visas that would permit them to say in the United States to work.”

Read the EPI analysis.