employment and wages

Neil Irwin, at the Upshot blog of the New York Times, has noted an interesting economic development: employers have reported a record number (since 2001) of job openings while, at the same time, noting a fairly flat level of actual hiring. This development runs counter to what one would expect. Since unemployment has been high for several years now, there should be a lot of people willing to take those jobs; if so, the trends relating to the amount of hiring and to he number of vacancies should roughly correlate.

Irwin notes two possible explanations for this discrepancy. Either potential workers are underskilled, leaving employers unable to find the employees they want, or firms are paying so poorly that unemployed people who have dropped out of the workforce are unwilling to rejoin it at those wages. (In a separate article in the New York Times a couple of days before, Binyamin Applebaum reported on the latter phenomenon.) Irwin thinks it's the latter, and that employers will soon have to raise wages. I hope he's right.