Tuesday, July 14, 2009
We all know this chart: the "death of the labor market" represented by the surging unemployment rate. This recession has so far driven the unemployment rate, currently 9.5%, to nearly double the Congressional Budget Office's (CBO) estimate of the natural rate of unemployment, 4.8%.
(see a description of nonaccelerating inflation rate of unemployment, NAIRU, or the natural rate of unemployment here, a list of available data at the CBO here, and the direct link to the data here)
In this environment, frictional employment - the lag in employment that results from job searching (not related to cyclical activity) - exists. Frictional unemployment should not be affected by the business cycle, but it's nevertheless conceptually amazing that it remains in times like these.
On the demand side, one would think that workers are willing to accept anything; and that reserve characteristics of a job, i.e., wage, environment, job description, somehow become less important. And on the supply side, there is a whole slew of potential candidates to choose from.
But frictional unemployment does exist. Finding the open positions and workers available is a large factor in frictional unemployment, even in this Great Recession. Perhaps frictional unemployment will fall with further measures like these. From the LA Times:
Several Fortune 500 companies are banding together to create a free new job board that will give users access to all their jobs with just one application.I have looked for jobs on Monster.com and other such job search-engines; it's frustrating, and that didn't go far. This is a cool website because it forwards applications from filled job openings to (presumably) related positions at alternate job openings. This may reduce some of the friction associated with finding the next potential position (or the next applicant).
The website is called United We Work and launched Monday with sponsorship from Sears Holdings Corp., AT&T Inc., Automatic Data Processing Inc., Allstate Corp., Hewitt Associates, Global Hyatt Corp., Office Depot, 7-Eleven Inc. and Starbucks Coffee Co. The site is free for up to a year for other companies seeking to post positions and will always be free for job seekers.
Kerr said that the site had about 350,000 jobs in its database and that he hoped to increase the listings to 500,000 by the end of the week. He said the jobs are culled only from corporate websites to help ensure their legitimacy.
Here's how it worked: Sears might get 100 applications for a single job posting. Once it filled the slot, it could pass along the other 99 applications to other companies in the network. Sears could also access other companies' leftover applications to search for qualified people.