Notice how the truth of things gradually dribbles out these days but about four years too late?
No kidding. The gap between the reported statistics and the underlying reality has never been wider. We need only look at the distance between employment and actual jobs.
The anomalies hardly end there.
Anyone who has been on the application end of the labor market suspects this. Often, you apply but never receive an answer. When you do, it is no and it comes eight weeks later. You look back at the job posting and it is still not filled and yet other jobs are now being advertised. There is something that feels vaguely phony about the whole thing. When you do end up in a position, it is not because you sent your CV through a job posting but because you visited the company, met the right person, or otherwise found a way in.
The beauty of the survey found by Spredemann is that it codifies something we all suspected was going on but it still raises the question of why this is happening. She offers some explanations.
Let’s take off the table the vast numbers of scams, Ponzis, and pyramid schemes that dominate job postings on Facebook. Consider only the seemingly real ones.
Managers often create “ghost postings” to develop a pre-qualified pool of candidates for future openings. They also do this in order to keep the heat on existing employees, to remind them that there are people waiting for their jobs. It’s a cynical tactic but there it is. Finally, the fake jobs postings create the appearance of a growing and vibrant company that is necessary to attract funding and boost valuations.
It all seems quite incredible. There is no one explanation but we can add a few other speculations. If you have whole departments dedicated to hiring, HR, and marketing, they are always looking for things to do. If there are no new jobs, many people find themselves without a job to do at the office.
Keeping a job marketplace alive is one way to do that, which is much cheaper and easier than hiring for the job.
In addition, companies might actually be using the collected data as a marketing and analytics tool.
This problem is large on the supply side of the labor market. What about the demand side? How many people who are submitting job applications actually have no true desire for the job? We have no broad data on that but, from experience, it seems like plenty.
Some people just like keeping their names out there and cannot be faulted for it. But there seem to be armies of people out there who just routinely submit applications to every platform that will take them. Unemployment benefits often require that renewed terms come with proof of being in the market for a job, and submitting to Indeed.com constitutes that.
If both the supply and demand sides of the labor market are packed with such rampant fakery, where does that leave us? In a very strange position for sure. The Federal Reserve years ago started posting the indexes of job openings at Indeed in the hope that it would provide a clearer picture than conventional jobs data. That seemed to work for a while but no more. Again, if the supply and demand side are off by as much as 50 percent, what use is it?
We are left in a bitter position. We have plenty of information-gathering technologies. We would seem to have better reporting than ever. There is really no excuse for not having a clear and scientific picture of labor markets in real time. Oddly, because there is not much noise in the system, and so much incentive to misreport, we are further off from that than ever.
The problem rears its head in each reporting period for jobs from the Bureau of Labor Statistics (BLS). There are two sources: household surveys and establishment surveys. For decades, they yielded roughly the same result. In the last several years, however, they have diverged more and more, to the point that one shows up and the other shows down.
The establishment survey has consistently shown job increases over the last three years. That’s the headline number that the BLS reports and all mainstream media echoes. Beneath that, however, is the actual household survey that asks people if they have jobs and deploys conventional statistical extrapolations as a way of discerning the whole.
It’s very obvious when comparing the two that the establishment survey is double and triple-counting when you compare it against surveys for full and part-time work. What appears to be job creation is actually people losing full-time work and getting two or three part-time jobs just to stay ahead of the bill collectors.
In other words, the reality on the ground seems to fit far more with the numbers presented in the drilled-down data sets that show not a healthy job market but just the reverse. This result is completely consistent with the same feeling people get about inflation data and output (GDP) data. The feeling you get on the ground reveals a decaying economic structure, even an inflationary recession, rather than the happy times proclaimed daily by government agencies and press releases.
Even given all this, and the huge loss of trust of the public in these agencies, one might suppose that we can still trust private jobs postings. The sad answer is that we cannot! And that’s very bad news for job seekers, of which there are more each day and a guaranteed far more in the coming year or two as the reality on the ground becomes ever more obvious.
What can you trust as a job seeker? You are likely to get the trust from the managers and owners themselves when you speak to them in person. And that’s the bitter irony. You are best off these days doing what we used to do in the past. You find the place you want to work and show up with your resume in hand, and you keep going back until you speak to the right person. As absurd as it sounds, this is what the decay of the digital world has done to us.
Another possible way: Pick up the phone. If you speak clear English, you might move ahead of the pack looking for a job. It’s a far better bet than relying on the Fed to fix the labor markets.
