High Number of Jobs but Little Hiring?

When the pace of employment starts to slow, there's always the worry that the recession will rear its ugly head again. The number of job openings has rarely been higher, but companies are still reluctant to take on new staff. Is this because employers are actually reluctant to hire, or are prospective employees simply not applying for these jobs?

The recession forced a lot of employees out of work, and many of these people formally stopped looking for job openings and were therefore no longer counted as unemployed in official figures. This is bad news for everyone, as it means that tax receipts are likely to fall and employers will be unable to fill places effectively when they want to expand.

Many of the current job openings are in low-paid occupations, leading many people to give up looking for work. After all, if you've been used to a job that pays thousands each month, you're unlikely to go for one that only offers minimum wage. As a result, jobs are simply not being filled.

This news is ominous, and it's even led the Treasury to consider curtailing its bond buyback scheme. This scheme has ensured the low interest rates that encourage businesses and individuals to borrow money to get the economy going and create new job openings, but it relies on growth and tax receipts to succeed. The job stats on slow hiring will likely force the Treasury to reduce the $85 billion scheme by $10 or $20 billion to match predicted tax incomes.

The good news is that the manufacturing industry has finally started to add jobs, which is a boost after a five-month stretch of job losses. This may mean that efforts to reshore manufacturing jobs are starting to have an effect on the economy, although this could also be the annual manufacturing boost for goods expected to be sold in the run up to the holiday season.

While the federal government has continued its policy of losing around 3,000 jobs per month, local education departments were responsible for a gain of around 17,000 jobs. Again, this was an expected gain based on the beginning of a new school year. 

While slow hiring results in a rather bleak outlook, the number of new job openings is a reasonably positive step toward boosting the economy. While people may not be as willing to take on these lower paid jobs, they have to make money somehow in order to live. This is good news for HR departments looking to hire, as it's still an employer's market out there, particularly for companies advertising for higher-end positions.

While some people have given up temporarily, the winter should see a rise in people accepting a range of job openings as they realize that they need the money to live and to pay for essentials. Eventually, this should lead to more money circulating in the economy thanks to the trickle-up effect.

(Photo courtesy of franky242 / freedigitalphotos.net)