Why almost no one is looking hard for a job
There are around 10 million unemployed Americans and over 9 million open positions. But most people aren't urgently seeking out those jobs.
The big picture: For the first time in decades, workers have the power to be choosy.
By the numbers: Only about 10% of job seekers say they're actively and urgently looking for work, according to a new survey from the jobs site Indeed. Around 45% are passively looking for jobs, and another 30% plan to get a job in the near future but aren't looking at all right now.
What's happening: Most of the open jobs are in low-wage areas like the service industry, which is bouncing back after the pandemic but struggling to find workers.
- "These jobs are not very good," says Steven Fazzari, an economist at the Washington University in St. Louis. "They’re hard work, and they don’t pay very well."
- For low-wage workers, pandemic-era expanded unemployment insurance has provided some temporary bargaining power. "They might be able to pay the rent or pay the utility bill without that job" and hold out for better pay or benefits, Fazzari says.
Workers without college degrees — who also tend to be in lower-wage jobs — cite several different reasons for delaying the job search, per Indeed's data.
- Around 25% are afraid of COVID-19 and are waiting for vaccination rates to climb before getting back to work.
- More than 20% say they have a financial cushion and around 12% say their unemployment insurance is the reason they're not rushing to get a job.
- Childcare is also a major factor. 20% of lower-wage workers are staying home due to care responsibilities.
What to watch: This moment could be a turning point for American workers. Demand for labor is sky high, so lots of firms are offering higher wages or perks to attract talent.
But, but, but: While workers may have the edge right now, "I'm really skeptical that what we're seeing is the start of a new era of worker bargaining power," Indeed economist Nick Bunker says.
- The wage hikes and benefits could start to disappear in the fall as many of the circumstances allowing or pushing lower-wage workers to delay the job hunt change, he says.
- Many states have already ended pandemic unemployment insurance, and others will do so in the coming months. An analysis from the firm Jeffries reported by the Wall Street Journal shows that states that have ended UI have lower rates of unemployment than those that have not.
- And schools are set to fully reopen, sending parents back to work.