On the surface, it doesn’t make any sense. The jobless rate doesn’t even count millions of people who have left the labor force entirely in recent years and might be coaxed back in. So any employer with a job opening should have no problem hiring. If anything, the ratio of openings to hiring should be lower than it was in the mid-2000s, not higher.
Here’s a theory to try to make sense of the disconnect: During the recession, employers got spoiled. When unemployment was near 10 percent, talented workers were lined up outside their door. The workers they did have were terrified of losing their jobs. If you put out word that you had an opening, you could fill the job almost instantly. That’s why the ratio of job openings to hires fell so low in 2009.
As the economy has gotten better the last five years, employers have had more and more job openings, but have been sorely reluctant to accept that it’s not 2009 anymore in terms of what workers they can hire and at what wage.
This is most evident in the rush to get more H-1B visas for tech workers. We've been told for a decade now that America isn't producing enough engineers and programmers, and the reality is that employers don't want to pay American ones at a fair market wage, They want cheaper imported labor. In effect, this is playing out all over the country. Employers naturally want to hire as cheaply as possible, but the days of "I'll take that job for nothing just so I'm employed again" are over.
There are some early hints that this day is coming soon. In the National Federation of Independent Business survey of members released Tuesday, 22 percent of small businesses reported increasing compensation versus 2 percent that said they reduced pay. Their outlook for pay increases in the coming months rose. The November jobs numbers released last week showed a 0.4 percent rise in average hourly wages for private sector workers.
All this is fragmentary evidence, and after years of stagnant wages, we’ll need a lot more solid proof that something has changed before proclaiming a wage boom has arrived. But in this standoff between businesses that want high-skilled workers for minimal pay and workers who want to see raises, one side has to give.
And it's going to be employers. How much, we'll see, but I wouldn't be surprised to see wage numbers start going up soon. There are now too many unfilled jobs.