realitybase - Journal

Scott Winship has plotted here the number of unemployed persons in the labor force divided by the number of advertized job openings from 1951 to 2010. In good times, there were more advertized job openings than unemployed persons in the labor force. In bad times, the ratio of unemployed to job openings rose as high as 2.5. In the Great Recession, the ratio has been 4, 5, and 6.

In recent months the ratio has started to drop, but at least some of that is because discouraged workers have dropped out of the work force, which they tend to do when their unemployment compensation benefit periods have expired. Despite this, there is no shortage of Marie Antoinettes, e.g. this candidate for governor of Pennsylvania, arguing to stop unemployment benefits because they make people stop looking for work. What? All six people eligible for that one job stayed on "vacation" and the job went unfilled? These elitist pols and pundits need to get out of their echo chamber occasionally.

Hat tip to Mark Thoma.

Update on Friday, July 16, 2010 at 04:19PM by

Skeptic

Shadowstats has a nice chart here plotting three different measures of unemployment since 1994. The "official" rate (called "U3" by BLS) is just under 10%. The broadest BLS rate, "U6," includes short-term discouraged and other marginally-attached workers, as well as those forced to work part-time because they cannot find full-time employment; it stands at about 17%. Shadowstats has generated a series consisting of U6 plus long-term discouraged workers, which BLS stopped counting in 1994; by that measure the unemployment rate is about 22%.