Jobless workers face a buyers' market in '11

WASHINGTON - Companies planning to ramp up hiring this year will have a luxury: their choice from among a flood of applicants, without having to pay a premium wage for top talent.

That is because there are nearly five unemployed workers competing for each available job, according to a Labor Department report Tuesday. That is giving employers more confidence, while at the same time enabling them to keep wages low.

The lack of opportunities over the last three years means it is risky for job seekers to be choosy, particularly for those who have been out of work for more than six months. All that makes for a buyers' market, leaving hiring managers with little incentive to negotiate over pay for new hires.

"They don't have to pay higher wages to get who they want," said Heidi Shierholz, an economist at the liberal Economic Policy Institute.

Employers advertised 3.25 million jobs in November, according to the government report. That is 39 percent higher than the number of jobs advertised in July 2009, a month after the recession ended. But it is still far below the 4.4 million openings posted in December 2007, when the economic downturn began.

Perhaps more important is the number of people competing for those jobs. With 15 million unemployed in November, the ratio was 4.6 unemployed workers for every open job.

The ratio reached 6.3 in November 2009, the highest since the department began tracking job openings in December 2000. Still, in a healthy economy, it would fall to between 1.5 and 2 per job opening, economists say.

While openings are up 39 percent from the low during the recession, monthly hiring has risen only 4 percent to 4.2 million in the same period.

"It is disappointing that 17 months into the recovery, the hires rate still remained at depressed levels," said Credit Suisse economist Henry Mo.

Economists do not agree on the reasons for the gap. Some say the unemployed lack the right skills for the available jobs. Others cite the housing slump, which makes it harder for those out of work to sell their homes and relocate to take a job.