"Employers are hiring and they don't have their pick of the litter anymore ... but they're still looking for the ideal candidate," explains Jason Faberman, a senior economist at the Federal Reserve Bank of Chicago, who analyzed Labor Department data with economists Steve Davis and John Haltiwanger.
"Anecdotal evidence we've seen, for the most part, is that firms are just really picky," Faberman says. "They're waiting for the perfect candidate."
Even though 12 million Americans are currently looking for work, there are 4 million job vacancies. And a New York Times analysis of data from Glassdoor.com, a site that collects information from employees, the interview process at major companies like Starbucks and General Mills has doubled since 2010.
Employers fear making a "bad hire."
Although the economy is rebounding, money remains tight. Small businesses, which aren't yet seeing the booming profits of major corporations, are particularly hesitant about hiring, according to recent surveys. The gridlock in Washington also isn't helping to boost confidence about a sustained recovery.
Workers without college degrees hurt the most.
The unemployment rate of high school graduates without any college was 7.9 percent in February, over twice as high as the rate for college graduates. And Americans without a high school degree are unemployed at the stunning rate of 11.2 percent. Connected to this trend, employers increasingly require college degrees for roles that don't involve college-level skills, such as receptionist, file clerk and administrative assistant. And the still-high unemployment rate means that plenty of people are willing to take a job, even if they're overqualified.
While the unemployment rate has been steadily decreasing, falling to 7.7 percent in February, the lowest in four years, it hasn't been dropping nearly as fast for those who have been unemployed for six months or more, according to research from the Federal Reserve Bank of Boston.
If companies are already anxious about hiring, they're more likely to weed out those who have been out of the workforce for a while, because of fears that their skills are rusty, or beliefs, which are often misguided, that if the person was a good worker, they'd still have a job.
"That added pickiness, it definitely hurts the long-term unemployment," says Faberman.
When Rand Ghayad, a scholar at the Federal Reserve Bank of Boston, sent out 4,800 resumes from fictional applicants with identical credentials, but who'd been unemployed for different durations, he found that he almost never got a response when the made-up candidate had been out of work for over six months.
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