This year's Nobel prize of economics was awarded yesterday to a trio of economists who have contributed to research in labor market frictions. Given the persistently high unemployment in the US, now at 9.6% and expected to go higher, the prize seemed to have a good timing. But despite their contributions, policy makers today still could not solve the problem. So is it just a mockery?
WSJ today has a good story (also good timing), on why there are so many unfilled job openings despite the high unemployment rate:
Among the explanations for the stubbornly high U.S. unemployment rate, factors such as housing troubles and extended unemployment benefits have played a leading role. Increasingly, though, economists and job seekers are identifying another problem: Employers are being pickier, or not trying as hard as they usually do to fill the openings they have.
The reasons for the foot-dragging are closely related to the reasons employers aren't creating many openings in the first place. Companies lack confidence about the outlook for consumer demand, they're not sure what the government will do with taxes and regulation, and they want to keep squeezing as much output from their current workers as they can. They also feel they have plenty of time to pick the best candidates.