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Some Firms Struggle to Hire Despite High Unemployment

A worker at Mechanical Devices in Bloomington, Ill., where the company set up a training program to fill open machinist jobs. ENLARGE
A worker at Mechanical Devices in Bloomington, Ill., where the company set up a training program to fill open machinist jobs. Daniel Shea for The Wall Street Journal









The Long-Term Unemployed


Faces—and Fates—of the Jobless

Although some employers report trouble finding workers, about 4.4 million Americans have been looking for jobs for at least a year—and that doesn't include the ones who have given up. Read some of their stories.







"We've always been looking for a needle in a haystack," she says. "There's still only one needle, but the haystack has gotten a lot bigger than it was before."

Longer-term trends are at play. For one, the U.S. education system hasn't been producing enough people with the highly specialized skills that many companies, particularly in manufacturing, require to keep driving productivity gains. "There are a lot of people who are unemployed, but those aren't necessarily the people employers are looking for," says David Autor, an economist at the Massachusetts Institute of Technology.


At Mechanical Devices, which supplies parts for earthmovers and other heavy equipment to manufacturers such as Caterpillar Inc., part owner Mark Sperry says he has been looking for $13-an-hour machinists since early this year. The lack of workers is "the key limitation to the growth of our business and to meeting our customers' expectations," says Mr. Sperry. He estimates the company could immediately boost sales by as much as 20% if it could find the 40 workers it needs.

Trips to several job fairs yielded almost nothing, so the company set up a 10-week training program to create its own machinists. Out of the first group of 24 trainees, 16 made it to graduation.

Mr. Sperry sees extended jobless benefits as one of the main culprits behind his company's hiring difficulties. Many of the applicants he saw at job fairs, he says, were just going through the motions so they could collect their unemployment checks.




Unemployment benefits, though, can't explain the whole problem. Researchers at the Federal Reserve have estimated that the benefits could account for between 0.4 and 1.7 percentage points of the unemployment rate. That doesn't cover the 2.7-percentage-point gap between the current jobless rate and what Mr. Altig's analysis of job openings suggests the rate should be.

Some of the people who dropped out of the Mechanical Devices training program aren't collecting unemployment benefits and offer other reasons why they couldn't or wouldn't do the work. Former truck driver Troy Arnett says the prospect of standing in front of a machine all day was just too restricting after a career spent making about $60,000 a year on the open road.

"I figured in these economic times you've just got to bite the bullet, and I couldn't do it," says the 42-year-old Mr. Arnett. He considers himself among the lucky ones: He has since found a job installing railroad crossings that he expects will pay about $50,000 a year.

Employers say getting people to move for work has been especially difficult this time. Often, that is a function of the mortgage and credit problems many potential employees face. In a recent study, Fernando Ferreira and Joseph Gyourko of the University of Pennsylvania, together with Joseph Tracy of the Federal Reserve Bank of New York, found that people who owe more on their mortgages than their homes are worth are about a third less mobile.

At Emirates, four cabin-crew job fairs the airline held in Miami, Houston, San Francisco and Seattle attracted an average of about 50 people each, compared to a global average of about 150 and as many as 1,000 at some events in Europe and Asia. "I would have liked to have seen more and would have expected to see more," says Rick Helliwell, vice president of recruitment.

The jobs require little more than a high-school diploma and fluency in English. They include free accommodation and medical care, and starting pay of about $30,000 a year. Mr. Helliwell speculates that Americans might be hesitant to move to Dubai, where the jobs are based. "Maybe they have less of an adventurous spirit" given the uncertainties they face at home, he said.

The obstacles to moving are aggravated because many employers no longer provide the same job security they have in the past. Temporary jobs, for example, have increased 21% since September 2009 as more employers—including Mechanical Devices—hire through staffing agencies to help control health-care costs and maintain flexibility.

David Denton, a 63-year-old quality-control expert, recently quit a temporary job at Mechanical Devices. He says the terms of employment simply weren't attractive enough to make him pick up stakes and move. The one-hour commute from his hometown of Mt. Zion, Ill., proved to be too burdensome, he says, as the cost of gasoline cut into his $15-an-hour wage.

Like a number of older workers, Mr. Denton has decided to leave the work force rather than accept a lower-paying job. Mr. Denton says he plans to live on savings until he can collect full Social Security benefits at age 66. "I'm trying to hang on the best I can," he says.

The disconnect between workers and jobs could constrain the economy for some time. It makes it hard for even small firms, which as a group typically account for an outsize share of job growth in a rebound.

Paul McNarney, owner of The Mower Shop in Fishers, Ind., says he has been looking for a good lawnmower mechanic so he can guarantee a one-week turnaround on repairs. He received only two responses to an Internet ad he placed a couple of months ago, even though the job can generate income of more than $40,000 a year, depending how many mowers the mechanic repairs. Similar ads he placed before the recession attracted more than a dozen candidates, he says.

"My thought was that in a cr— economy I could probably find somebody good because a lot of people were looking," says Mr. McNarney, who has been in business for 13 years selling everything from simple lawnmowers to big riding models for large properties. "I didn't find anybody."

Write to Mark Whitehouse at

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