The Labor Department released some good news Tuesday: The number of job openings is exploding. We now have close to the highest number of vacancies on record.
Three measures from the National Federation of Independent Business’s latest small business optimism survey suggest that firms are having trouble locating and hiring quality workers.
As shown in the chart above, a rising share of businesses are complaining about finding few or no qualified applicants for jobs they’d tried to fill recently. Likewise, a rising share of firms say they have openings they are not able to fill right now. And the percent of businesses naming “quality of labor” as their single most important problem (other options include poor sales, taxes, inflation, government red tape) has also been trending upward.
Meanwhile, another metric finds the length of time it takes to fill the average job opening is still very high by historical standards. As of December, it took about 27 working days to fill a vacant job position.
Some industries are struggling more than others to find qualified workers. Vacancy durations in construction are taking about twice as long to fill as the historical average (15 days in December, vs. a long-term average of about 8 days).
A separate report from the National Association of Home Builders released in November found rising reports of labor shortages across nearly all trades:
There may be some special factors affecting construction (i.e., recent housing bust, declines in immigration), but employers across almost all industries seem to be having problems finding talent.
All this is a bit peculiar, when you consider that wage gains have been so pitiful this recovery. Economists usually argue that labor shortages lead to bidding up the wages of the precious few workers available. (Not all agree, though.)
Stagnant wage growth may be one reason why so many prime-working-age Americans continue sitting out of the labor market altogether. Employers may need to start offering better pay — or else getting less picky about whom they hire — if they want to lure people back into the workforce.