According to the Economic Policy Institute, there are about 4.7 job seekers for every 1 job opening (Shierholz, July 2010). Sounds bad, right? Actually, this is an improvement from data from March 2010 (Shierholz, May 2010) in which there were 5.6 job seekers for every available position.
“With so many unemployed workers per available job, people who find themselves out of work can be expected to remain unemployed for extremely long periods. In May, nearly half (46%) of this country’s unemployed workers had been unemployed for over six months” (Shierholz, July 2010).
A Washington Post article reported that companies are sitting on a large pile of cash fearful of adding jobs. In fact, nonfinancial organizations are “sitting on $1.8 trillion in cash, roughly one-quarter more than at the beginning of the recession” (Yang, 2010).
Though it’s evident that people need jobs and companies need to hire, the question becomes how do we encourage organizations to do so?
“A survey last month of more than 1,000 chief financial officers by Duke University and CFO magazine showed that nearly 60 percent of those executives don’t expect to bring their employment back to pre-recession levels until 2012 or later — even though they’re projecting a 12 percent rise in earnings and a 9 percent boost in capital spending over the next year.
When asked why companies are holding back so much, many economists cite broader uncertainty that goes well beyond anything happening in Washington. Firms aren’t sure whether the economy can sustain a strong recovery. And as long as consumer spending remains low, there’s not much incentive for companies to ramp up” (Yang, 2010).
The Economic Policy Institute predicts that it could take one to four years for the jobs to come back (Bivens & Shierholz, 2010).
Bivens, J. & Shierholz, H. (2010, March). For job seekers, no recovery in sight—Why prospects for job growth and unemployment remain dim [EPI Briefing Paper #259]. Retrieved from http://www.epi.org/publications/entry/bp259/
Shierholz, H. (2010, July). Job seekers still face intolerable odds. Retrieved from http://www.epi.org/publications/entry/job_seekers_still_face_intolerable_odds
Shierholz, H. (2010, May). Unemployed workers outnumber job openings 5.6-to-one in March. Retrieved from http://www.epi.org/publications/entry/unemployed_workers_outnumber_job_openings_5.6-to-one_in_march/
Yang, J. L. (2010, July). Companies pile up cash but remain hesitant to add jobs. Retrieved from http://www.washingtonpost.com/wp-dyn/content/article/2010/07/14/AR2010071405960.html