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Unemployment in the United States remains low but many do not see the benefits

Many Americans say they face persistent barriers to finding jobs, even as employers struggle to fill vacancies in the most worker-friendly U.S. labor market in half a century.






This apparent contradiction between official reports of a glut of job vacancies and the belief of many job seekers that available positions are limited is one of the main lessons of the third edition of the American McKinsey’s Opportunity Survey, which explores Americans’ perceptions of the present and the future. the state of the US economy and their place in it (see sidebar, “About the survey”).

Part of a series, this article presents the results of our latest labor market survey and the reasons Americans give for why they are out of work and unable to find a new job. While news stories often focus exclusively on the surplus jobs available overall, many survey respondents say they face a shortage of suitable jobs in terms of geography, skills and non-wage considerations such as than flexibility.






The unemployment rate was 3.5% in July,
corresponding to the 50-year low reached in February 2020. There are 1.9 open positions
for every unemployed American, and employers are responding by raising wages and offering alternative work arrangements to attract and retain workers.

Yet many employed and unemployed survey respondents see a starkly different reality, with the largest group (28%) saying the biggest barrier to their job search is the limited availability of jobs (Figure 1 ). Additionally, a US Bureau of Labor Statistics survey shows there were 424,000 “discouraged workers,” a subset of workers who are not in the labor force, in July 2022 (similar to levels pre-pandemic).
This suggests either that the jobs available are not those sought by job seekers, or that job seekers do not match the profile sought by employers.





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Geographic mismatch

The survey confirms recent reports of large-scale turnover in the labor market. According to the Bureau of Labor Statistics, 4.2 million people quit their jobs
in June to pursue other opportunities. Of the 25,000 respondents to the American Opportunity Survey, nearly half say they have actively looked for a new job in the past 12 months, are currently looking for a new job, or plan to start looking next year (Figure 2). The numbers were highest among city dwellers of all regions, indicating vibrant labor markets in these regions. At the same time, city dwellers are the most likely to say they have access to jobs, with 60% saying this is the case, compared to 48% of rural respondents and 57% of suburban respondents.


More than half of urban respondents say they are looking for a new job.



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More urban respondents also say it would be easy to change careers or occupations. At the same time, the majority of city dwellers in the West, Midwest, South, and Northeast are the most likely to express concerns about job stability.

About a third of respondents in suburban and rural areas say that a limited supply of jobs is one of the top three barriers to their search for a new job, compared to about a quarter of urban residents.

The survey also highlights one of the rigidities that could prevent many people from being employed. Only 33% of unemployed respondents looking for a job say they are willing to move for a job, and this rate is higher for unemployed respondents outside urban areas. But among unemployed respondents looking for work, 68% say they would be willing to work entirely remotely.

This suggests that, rather than expanding in-person job opportunities in rural and suburban areas or attracting rural and suburban job seekers to urban centers, the greater availability of remote work opportunities could help job seekers find employment, especially in rural areas. Without this change, however, rural economies will likely continue to have fewer job opportunities.

Skills mismatch

The second most cited barrier to employment is a perceived mismatch between job seekers’ skills and employers’ requirements: 26% of respondents say that a lack of experience, relevant skills or credentials and/or education prevents them from being hired (Table 3). This is especially true for women, who are 1.2 times more likely than men to say this was the case, and for people of color, especially Asian Americans, who are 1.5 times more likely than white respondents to cite a skills mismatch. Women were less likely to report having taken training, education or certification opportunities to advance their careers (34%, compared to 46% for men).


A quarter of respondents say the inability to learn new skills has a major or moderate impact on their ability to do their job.



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Additionally, a quarter of employed respondents say a lack of skills has a major or moderate impact on their performance, with around 40% of those in the two youngest age cohorts – 18-24 and 25-34 – most likely to say it was. Respondents of color were more likely than whites to report this as well.

These findings underscore the need for employers to increase their learning budgets and commit to retraining to ensure their employees are equipped with the essential skills needed in the post-pandemic era. Programs such as the Markle Foundation-led Rework America Alliance, of which McKinsey is a partner, could make a difference.

The alliance emphasizes skills-based hiring rather than credentials, aiming to tap into a pool of 106 million workers who have developed capabilities through experience but whose capabilities often go unrecognized because they don’t have a four-year college degree.

Mismatch of expectations and demand for flexibility

A third potential explanation for the mismatch between job offers and job seekers involves a difference in expectations, particularly in terms of pay and flexibility (Chart 4).


Higher pay and flexible working arrangements are the two main reasons given for looking for a new job.



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Forty percent of all job seekers say the desire for better pay or working hours motivates their search for a new job. Although most groups say that their salary allows them to have a good quality of life, there is an important discrepancy: only 50% of women say this, compared to 61% of men. Transgender and non-binary respondents, as well as those who identify as multiracial non-Hispanic/Latino, Alaska Native and Native American, and those in the lowest income brackets, are the least likely to agree with this statement.

After better pay or hours and better career progression, the other top reasons for looking for a new job include flexible work arrangements, such as the ability to work from home or bring a child to work (22%) and schedules and predictable schedules (16%). percent).

A previous article
pointed out that 58% of employed workers – which, extrapolated from the representative sample, equals 92 million people – are offered the possibility of working from home. For employers, offering flexibility around working from home can be the key to unlocking participation for the unemployed. For example, 68% of unemployed job seekers, the equivalent of four million people, say they would be willing to work remotely.

With the appetite for remote work outpacing its availability and flexible arrangements being cited as one of the top reasons for finding a new job, expanding flexible working arrangements could help attract and retain more workers.

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