3 Reasons You Can't Find a Job

Release Date
May 13, 2013

Topic

Free Markets and Capitalism
Description

Why is it so difficult for young people to find jobs today? Professor Carrie Kerekes offers three reasons.
1.       Mismatch of skills: Many young people may lack the skills employers desire or require. They may have college degrees but not in fields where jobs are available. Government may help subsidize college costs, but getting a degree does not guarantee that a job will follow.
2.       Government regulations: Many government regulations add extra expense to the cost of labor or make it more difficult for firms to hire and fire workers. These regulations may cause the number of available positions to be lower than it would be absent such rules.
3.       General uncertainty: As the economy continues its slow recovery after the financial crisis, many firms feel uncertain about the future, which makes them hesitant to hire new workers. New legislation, such as the Affordable Care Act, can also add to uncertainty when it is unclear how much the new rules will increase the cost of labor.
The common factor in all of these reasons is government. Prof. Kerekes says, “The unemployed would be better served if government stepped out of the picture and allowed economic growth and a free market to create more jobs and prosperity.”

Response by Professor Aeon Skoble (video): Professor Aeon Skoble of Bridgewater State University responds to a recent Learn Liberty video, “3 Reasons You Can’t Find a Job,” to defend the value and utility of obtaining a humanities degree
How to Reduce Unemployment If We Want  [article]: Morgan Rose at the Library of Economics and Liberty discusses the employment effects of minimum wage laws and unemployment insurance
Diminished Prospects for the Long-Term Unemployed [article]: An NPR story about the growing skill-set gap and how it affects the lives of individuals
Is Unemployment Caused by a Skills Mismatch (video): Is today’s unemployment caused by a skills mismatch or by the economic cycle? PBS News Hour debates…
So You Have a Liberal Arts Degree and Expect a Job? (video): PBS News Hour explores how a glut of liberal arts degrees may be the source of our lingering unemployment problem
The Jobless Rate for People like You [interactive graph]: A cool NY Times interactive graph on the demographics of joblessness
Uncertainty and Unemployment [article]: A Washington Times article on how political uncertainty leads to unemployment and economic stagnation

3 Reasons You Can’t Find a Job

Why is it so hard for young people to find jobs these days? Three broad reasons come to mind.
1.Inappropriate skill sets,
2.Government regulations, and
3.Uncertainty.
Youth unemployment may partially be the result of a mismatch between the skills young adults possess and the skills employers require of their workers. Younger individuals already have less experience and training. But even people with college degrees may find that they do not possess the appropriate skills for the jobs employers are looking to fill. Government can subsidize education and send more people to school through loans and grants, but this does not guarantee future employment.
Second, government regulations and taxes may also be part of the problem. Things like minimum wage laws, overtime pay mandates, payroll taxes, health care regulations and unemployment insurance all make it more costly to employ labor. When it is more costly for firms to hire workers, employers hire fewer workers. Some of these costs may not be immediately obvious. Take, for example, laws that make it more difficult for firms to hire and fire workers as they see fit. Why could this cause more unemployment?
Compare it to dating. Imagine that any blind date you went on had to result in marriage. Would you ever go on a blind date? I doubt it. The same goes for a company that’s interested in hiring more workers but worries about not being able to fire a new employee if they’re not working out. They won’t want to take chances. So firms are particularly reluctant to hire young workers who lack experience and do not have an employment record to prove that they’re reliable.
Finally, there are many reasons for employers to feel uncertain about the future. For example, we’re experiencing a slow economic recovery after a major financial crisis. Further, consider something like health care reform. The recent health care bill is very long and there is much debate and unanswered questions about what its ultimate impacts on the cost of labor may be. All this creates uncertainty, which makes employers more cautious in hiring workers.
These three reasons—mismatch of skills, regulation, and uncertainty—are three potential reasons why many young people are having a hard time finding work right now. Each of these three reasons has one factor in common: government. Interventions haven’t helped things and they have likely made things worse. The unemployed would be better served if government stepped out of the picture and allowed economic growth and a free market to create to more jobs and prosperity.