Job openings at highest level in four years
A 'now hiring' sign is viewed in the window of a fast food restaurant on August 7, 2012 in New York City.
Jeremy Hobson: Now to some new numbers from the Labor Department. Job openings jumped to a four-year high in June: 3.7 million. Seems strange, considering we learned less than a week ago that the country has an 8.3 percent unemployment rate right now.
To help us make sense of this, we've got John Sylvia on the line from Charlotte. He’s chief economist with Wells Fargo. Good morning.
John Silvia: Good morning.
Hobson: Explain this discrepancy John, how is that possible with this kind of unemployment rate that U.S. job openings are at a four-year high?
Silvia: Well, I think the dominate factor is the skills mismatch. You have a lot of unemployed people and we can think about a lot of people in the construction business – building the housing etc. – and then manufacturing, once they become unemployed it’s unlikely they’re going to be able to take jobs in the professional and business services, education and health. Those sectors require a very very different set of skills.
Hobson: Well, if part of the mismatch is due to people in construction and manufacture, does there need to be a new push for a rebirth of the manufacturing industry in this country or just more training for those people to move into other professions?
Silvia: Yeah, I would emphasis the training. The modern manufacturing worker is not the assembly line worker turning a screw, like they were in the old days. The modern manufacturing worker often works with a laptop or manipulates a screen or something. So I think its retraining workers to deal with the modern 21st century manufacturing.
Hobson: Is the mismatch getting worse or better right now? Are there more job openings compared to the amount of people who are out of work?
Silvia: Yeah, if you look at the imbalance between unemployment and vacancies, it has gotten worse over the last year or two, in part because we’re not generating and getting these people the training that they need to be competitive. Now, for a lot of young people just out of college that’s not true. Young people are adaptable, they’re willing to try things, they’re easier to move. So what you see here is a rising problem for people in their late 30s, 40s, and 50s but a diminishing problem in terms of young people.
Hobson: John Silvia, chief economist at Wells Fargo, thank you so much for your time this morning.
Silvia: You got it, thank you.