Labor Lost, and Found

From the NY Times

 

By HANNAH FAIRFIELD

Published: June 6, 2009

Last year, 57 million people started new jobs,
despite the floundering economy. Most of them had left a job recently -
by choice or not - but successfully found a new one in the same
industry.

Graphic

The sheer size of job
turnover in the United States is staggering. Even as unemployment has
climbed, every sector has millions of jobs waiting for qualified
applicants.

The figures for hires and separations (employees who
quit, retire or are fired) and job openings provide crucial information
about job demand by surveying 16,000 employers every month.

"The
labor market is like any other market, driven by supply and demand,"
said John Wohlford, branch chief of the Job Openings and Labor Turnover
Survey at the Bureau of Labor Statistics. "But for a long time, we only
measured the supply, in unemployment. The job openings survey, started
in 2000, allows us to measure demand."

Some employment sectors,
like retail and manufacturing, may be leading indicators for economic
changes. Others, like heath care and education, seem unaffected by the
recent turmoil.

In many industries, as the number of hires begins
to fall, separations decline as well, because employees may be
reluctant to leave jobs if they believe it will be harder to find new
ones. When the number of separations ticks upward even as hiring falls,
as in the construction sector last year, it means that employers have
been forced to shed jobs.

How employers respond to economic
downturns, and when they turn to layoffs to keep their businesses
afloat, is a research question being studied by Steven J. Davis, a
professor at the University of Chicago's Booth School of Business.

"Employers
like to use attrition to adjust to changing markets, but that's not
enough to achieve downsizing," Professor Davis said. "You can see it
clearly in the data: an employer who shrinks more than a few percentage
points will have to depend on layoffs."

Economists are now
looking closely at possible bellwether industries, like food service
and retail. When consumers start spending their money on restaurants
and new clothes, employers start hiring, and we all start seeing more
of those welcome "help wanted" signs.