U.S. Job Shortage Reaches Record Level of 12 Million
The most recent data from the federal Bureau of Labor Statistics (BLS) show that, for 11 straight months, the nation's job shortage has exceeded 10 million jobs. In other words, for nearly a year, there have been 10 million more unemployed Americans than job vacancies. For the last nine straight months, the U.S. job shortage has actually exceeded 12 million jobs.
Put another way, since May of last year, over 12 million American job seekers would have had no jobs available to them if every single vacant position in the labor market were filled.
In January 2010, the most recent month for which BLS has released both unemployment and job vacancy data, 15.1 million officially unemployed American workers were competing to fill 2.7 million job openings — a nationwide job shortage of over 12.3 million.
The job shortage is actually far more severe than the BLS data suggest, for several reasons.
"To begin with, a lot of adults who are truly unemployed simply don't get counted as unemployed because they don't fit the BLS' official definition," Riemer explained.
Among these are hundreds of thousands of individuals who want a job now, are available to work and have searched for work during thei prior 12 months, but have not made specific efforts to find employment during the four-week period prior to the BLS' survey.
"If the BLS included in its count these individuals who are truly unemployed but have given up, the number of unemployed would rise, and the job shortage would be even bigger," said Riemer.
The job shortage in Wisconsin is equally grim. BLS only collects unemployment data for Wisconsin and other states; it does not collect job vacancy data on a state-by-state basis.
Nonetheless, using a methodology explained in a technical note below, the Community Advocates Public Policy Institute estimates that the job shortage in Wisconsin for the last 11 months has consistently exceeded 200,000 jobs. In January 2010, there were 263,000 unemployed job seekers in the Badger State, but the economy had no more than 48,000 jobs on offer. The gap—the number of unemployed Wisconsinites for whom no job was available if every job opening in Wisconsin were filled—was 215,000.
The BLS data indicate that the official job shortage no longer seems to be growing. We must remember, however, that there are millions of “unofficially” unemployed in the United States as a whole, and thousands of “unofficially” unemployed in Wisconsin, that BLS doesn’t count as unemployed because—though they want to work, and would work if given half a chance—they’ve given up on actively seeking employment in the face of the overwhelming difficulty of finding work.
When the full measure of the unemployed is taken, it remains unclear whether the real job shortage is growing, flat, or declining.
Transitional Jobs Must Be Created to Put Jobseekers Back to Work
Despite the fact that unemployment has grown to levels unseen in decades, the nation's welfare system, Temporary Assistance to Needy Families, provides relief to only a small fraction of the unemployed, while the unemployment insurance system provides help for only about half of the unemployed.
"Policy makers at every level -- especially President Obama and the new Congress, but state and local officials as well -- need to act quickly to create transitional jobs," Riemer said. "The nation's jobseekers need to be able to support themselves and their families. But most don't want to go on welfare, and too few qualify for unemployment insurance. What they want is jobs."
"In this crisis of mass unemployment, we need to follow the New Deal example of Franklin Roosevelt and create a large-scale program that offers unemployed jobseekers transitional jobs that pay the minimum wage. This way, the unemployed can at least make ends meet until the private job market rebounds, maintain their dignity, and perform useful work to improve their communities."
Wisconsin Family Jobs Act Will Help Put People to Work
Fortunately, Wisconsin policy makers have begun to recognize the severity of the job shortage and take action to create transitional jobs. The Community Advocates Public Policy Institute commends the legislature for passing, and the Governor for signing, the Wisconsin Family Jobs Act (AB-898/SB-653).
Under the Wisconsin Family Jobs Act, sponsored by Rep. Tamara Grigsby and Sen. Spencer Coggs, an employer that hires an eligible participant in the state’s Trial Jobs program will receive a 100 percent wage subsidy at the minimum wage for the hours worked by that employee up to 40 hours per week for a maximum of 1,040 hours, or six months.
The bill also expands the Transitional Jobs demonstration project championed last year by Coggs, who sponsored a budget amendment in 2009 directing the Department of Children and Families (DCF) to create up to 2,500 wage-paying transitional jobs. The Transitional Jobs project will offer minimum-wage jobs not only to custodial parents, but also to non-custodial parents and childless adults who are seeking work, have incomes below 150 percent of the poverty line, have been out of work over four weeks, and don’t qualify for Unemployment Insurance.
The legislation passed the Senate by a bipartisan 22-11 vote on April 20, and passed the Assembly 87-10 on April 15. On May 13, 2010, Gov. Jim Doyle signed the Wisconsin Family Jobs Act into law at the University of Wisconsin-Milwaukee.
The Wisconsin Family Jobs Act increases the wage subsidy for DCF’s seldom-used Trial Jobs program so as to make it more attractive to employers, and remove the 2,500 cap on the Transitional Jobs demonstration project.
According to David Riemer, Public Policy Institute director, the Wisconsin Family Jobs Act is an important bill that will help alleviate the job gap by creating a stronger Trial Jobs and Transitional Jobs program. In January, Wisconsin’s job shortage—the number of unemployed Wisconsinites for whom no job was available if every job opening in Wisconsin were filled—had grown to 215,000.
“America’s job shortage has reached crisis proportions, and Wisconsin’s job shortage is equally severe,” said Riemer. “We cannot stand idly by, watching our fellow citizens who are unemployed search vainly for jobs that simply don’t exist, eating up their savings, wondering how they’ll pay the rent or put enough food on the table, yet unable to claim Unemployment Insurance because they don’t qualify or have exhausted their benefits.”
“This law will help put Wisconsin’s unemployed adults back to work, carrying out useful projects, until this terrible recession ends and they can return to the regular economy,” said Riemer. “Enacting the Wisconsin Family Jobs Act, so as to expand the state’s Trial Jobs and Transitional Jobs programs makes both moral and economic sense. I commend the bill’s sponsors, Rep. Grigsby and Sen. Coggs, for recognizing this dire situation and for taking the necessary steps to increase the number of jobs available to Wisconsin men and women.”
The Wisconsin Family Jobs Act will utilize potentially untapped funds through the TANF Emergency Fund that was created as part of the American Recovery and Reinvestment Act. Among other things, funding from the TANF Emergency Fund can be used to increase spending on subsidized employment programs.
Technical note: The data on US unemployment reported here are taken from four separate BLS reports—LNS 13023621, LNS 13023705, LNS 13023557 and LNS 13023569—which measure persons 16 years and over who had no employment during the reference week, were available for work and had made specific efforts to find employment during the four week period ending with the reference week. The four BLS reports deal, respectively, with: (1) job losers and persons who completed temporary jobs, (2) job leavers; (3) reentrants; and (4) new entrants. See http://data.bls.gov/cgi-bin/srgate as of 3/28/10 at 9 AM CT.
The total of these categories differs slightly from the monthly US unemployment levels reported by the BLS in LNS 13000000. Data on US individuals who want a job now, are available to work, and have searched for work during the prior 12 months, but have not made specific efforts to find employment during the four-week period prior to the BLS’ survey, can be found in the following BLS reports: LNU 05026639 (want a job now), LNU 05026642 (searched for work and available to work now), and LNU 05026645 (searched for work, available to work now, discouraged over job prospects—believe no job is available).
The data on US job openings reported here is taken from BLS report JTS 00000000JOL. See: http://data.bls.gov/cgi-bin/surveymost as of 3/28/10 at 9 AM CT.
The data on WI unemployment reported here are taken from BLS’ report on seasonally adjusted unemployment in Wisconsin, Series ID Number LASST 550000033. See: http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest
_numbers&series_id=LASST55000003. The data were extracted pm 3/28/10 at 9:30 AM CT.
Data through 12/09 reflects revised population controls, model reestimation, and new seasonal adjustment. Data for 2/10 is preliminary. The methodology for estimating Wisconsin job vacancies is to multiply (1) the ratio of Wisconsin unemployed to US unemployed (which has historically ranged from 1.7% to 2.2%) times (2) the US job vacancy figures.
