The Phantom Menace of Ghost Jobs: Distorting the US Labor Market

An Overview of Ghost Jobs in the US Labor Market

From the current US data, one might think that everyone looking for a job can easily find one. However, a deeper dive beneath the surface reveals a different picture altogether.

The levels of job openings reported by the US Bureau of Labor Statistics (BLS) for years have consistently shown that the number of available positions is at least equal to the number of unemployed workers. But when comparing job openings to actual hiring data, it becomes clear that not all of these positions are actually being recruited for.

In fact, the discrepancy is significant: according to BLS data, the average number of monthly job openings has exceeded the actual number of hires by more than 2.2 million since the beginning of 2024. This points to a persistent problem – "ghost jobs" that never seem to get filled (i.e., those that companies keep online for long periods but do not plan to actually hire for).

Jasmine Escalera, a career expert at the job assistance platform MyPerfectResume, points out: "The US labor market appears strong on paper. Millions of job openings suggest opportunities, but many of them are just phantoms."

The platform released a report this week on the hidden job market, stating that "the ghost job economy artificially inflates hope, wastes job seekers' time, and, more importantly, obscures the data that policymakers rely on to guide the economy."

Declining Job Openings and Rising Concerns

Since peaking at over 12 million in March 2022 – when the ratio of job openings to available labor exceeded 2:1 – there has been a general downward trend in the number of job openings. Due to the impact of the government shutdown, August is the latest month for which data is available, with the total number of job openings exceeding 7.2 million, while the actual number of hires was only 5.1 million, with a roughly even ratio of job openings to labor.

It's important to clarify that the actual situation is not as simple as comparing two numbers.

The number of job openings represents the number of available jobs, while the number of hires reflects the flow of labor in a given month. Therefore, a job may remain online for several months, but this does not necessarily mean that the company posting the job does not intend to hire anyone.

In addition, some companies post jobs to build a talent pool, preparing for potential future job openings.

Ultimately, the acceptance rate has continued to decline in the past few years – from 1.8:1 at the peak of the hiring cycle to around 1.4:1 currently, indicating that "ghost jobs" on the market are decreasing.

The Impact of Immigration and Labor Skills

One key factor affecting the gap is: as the US tightens immigration standards, the labor pool is changing. The National Federation of Independent Business reported on Tuesday that small business owners are facing the toughest time hiring since the pandemic, also noting that 88% of job seekers lack essential skills.

As the labor market begins to cool down and net hiring growth has nearly stalled, this issue has raised more serious concerns in recent months. At the same time, official data has been halted due to the government shutdown in Washington, D.C.

Job seekers are frustrated by the inability to find a job, employee mobility is slowing, and the "employee turnover rate" is down more than 30% from the peak of job openings in March 2022 – the peak of the so-called "Great Resignation".

A petition on Change.org calling for a crackdown on companies posting ghost jobs has garnered nearly 50,000 signatures.

This has a material impact at the policy level: Federal Reserve officials closely monitor job openings data from the Bureau of Labor Statistics to assess the tightness of the labor market, and distorted data will obscure their decision-making vision.

"For job seekers, this means wasted time; for policymakers, it leads to distorted data; and for employers, it can lead to a serious credibility crisis," Escalera emphasizes. "Unless job listings more accurately reflect real needs, workers will continue to chase jobs that don't exist, and trust in the labor market will continue to erode."

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