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Help Wanted Ads Drop, Labor Supply-Demand Ratio Rises

December 3, 2012

Online help-wanted ads in New Hampshire declined again in November according to the Conference-Board, although the number of ads remains substantially higher than it was in November of 2011. All occupational categories saw a decline in help-wanted ads with the exception of construction, production and transportation workers. This is consistent with anecdotal and some empirical evidence about the demand for production workers impacting employment growth as discussed in a November 21 post. For the second month in a row the largest percentage decline in ads was in professional, technical, and scientific occupations, although this broad occupational grouping still has the largest year-over-year increase in help-wanted ads in New Hampshire between November of 2011 and November of 2012.

The chart shows recent trends in help-wanted advertising in New Hampshire, along with the ratio of unemployed workers in New Hampshire to the number of help-wanted ads, the “supply-demand ratio” for labor in the state. After falling to about 1.4 unemployed persons for every help-wanted ad in the state, the ratio has been slowly rising and now stands at about 1.7 unemployed for every help-wanted ad. Of course this ratio says nothing about the match between the occupations of job seekers and the occupations advertised in the help-wanted ads, but regular readers know it won’t likely be long before I offer another “skills gap” post that discusses that issue.

Categories: Help Wanted, Labor, Unemployment
Tags: help-wanted, labor demand, labor supply, NH, unemployment

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The Skills Gap Debate – Round 1

October 18, 2012

Two charts may tell an important story about New Hampshire’s labor market and perhaps trends in the economy. Help-wanted advertising has been rising in NH and as I’ve written before, it suggests job growth should be higher in NH based on the long-term relationship between help-wanted ads and employment growth in the state. A “skills gap” is one explanation for the divergence between help-wanted and job growth in NH, but I also offered that the divergence, along with trends in aggregate wage growth in NH may mean employment numbers will be revised upward. My money is still on an upward revision of job growth, with the skills gap playing an important role for some industries and occupations, because NH has more help-wanted ads per 100 individuals in the labor force than all but 10 states – job growth should be higher (chart below).

I would be more convinced of the skills gap being broadly responsible for slow growth in the state if a high percentage of help-wanted ads in New Hampshire were for the highest skill occupations (professional, technical, scientific and management), but as the chart below shows, NH ranks well down the list of states on the percentage of help-wanted advertising that is for the highest skill occupations. A skills gap could still exist between available jobs and available labor for occupations requiring specialized skills and training, even if they are not in professional, technical , or managerial occupations. Anecdotal evidence suggest many employers are having difficulty finding workers with the right skills. The skills gap demands further investigation, right now I am more concerned about what the relatively lower demand in NH for the highest skill occupations implies about our state’s economy.