Why Isn't the Internet Helping the Unemployed?

It's pretty hard to try to imagine any reason it could be good to be unemployed right now. With unemployment stubbornly high, companies slow to hire, and unemployment benefits running out for many long-term unemployed, it's a grim situation for many. But jobless Americans do have one distinct advantage today compared to those looking for work during other downturns throughout history: technology is much better. Even as recently as recession that caused very high unemployment in the early 1980s, it was a very different world. Back then, people had to rely on newspaper wanted ads, employment agencies, or word-of-mouth to find jobs. Now the unemployed can utilize the power of the Internet to look for job openings across the country, or even the world. So why doesn't it appear to be helping much?

Of course, there's one really obvious reason: there just aren't enough job openings as there are unemployed Americans. That's quite easy to see through data released yesterday by the Bureau of Labor Statistics. In November, there were at least 15 million unemployed Americans looking for jobs, but only 3.25 million openings. That averages out to 4.65 job searchers per opening. So unless the Internet can magically create jobs, then it's not going to fix the problem.

But even for those jobs that are out there, the wide search radii provided by Internet job site searches might not be helping much. There are a number of factors that are preventing good labor mobility, which is the ability for job searchers to move from an area where they can't find to work to another area where work is available. Even if someone living in Ohio wants to move 66 miles from Mansfield, where the unemployment rate is 10.7%, to Columbus, where it's just 8.0%, some obstacles exist that could be preventing the move.

Own a Home

Everybody knows that the housing bubble's pop was one of the factors that led to unemployment rising to a catastrophic level, but it's also helping to keep it there by limiting labor mobility. If you own a home, even if you are current on your bills, you might not be able to move. In some cases, a mortgage may have gone underwater due to home prices falling. In other cases, even if the home has sufficient equity to allow a move, the buying demand is so weak and supply is so large that it could take months or years to sell a house for a reasonable price. If you can't sell your home, it's generally pretty hard to move.

Spouse Still Has a Job

Today two-income households are more common than ever. If a husband gets laid off, often a wife's income must be relied on, or vice-versa. And if one family member still has a job, then unless you can both simultaneously find new jobs in another location, moving might not help much. This forces many people to stay put even, if there's a job elsewhere available.

Don't Want to Leave Family

Even though we live in a world where it's physically easy for people to move away from their friends or family, many don't want to. Beyond the purely emotional need to be close to loved ones, there are often practical restraints. For example, if you are a single parent who needs to be close to your parents to provide free daycare for your child, then you can't simply skip town. Or if you have elderly parents who need special care, then you might not be able to move them as well. In the case of divorced parents, shared custody of children can also complicate moving for work.

The North Dakota Problem

In December, the unemployment rate in North Dakota was just 3.8%. Meanwhile, in Vero Beach, Florida, the unemployment rate was above 14%. So why wouldn't these people flee to North Dakota? Well, because it's North Dakota.

Many of the states suffering from highest unemployment rates are in the South or West, which also happen to be very desirable areas for weather. That's why they were such big centers for the housing boom and now are suffering worse than most others. Meanwhile, some of the lowest unemployment rates happen to be in very undesirable areas to live, like the upper-Midwest. They often weren't as affected by the housing boom. Even if moving across country wasn't physically difficult and expensive, some people just don't want to deal with the climate-shock. The gleaming exception to this rule is Hawaii, which enjoys a 6.4% unemployment rate.

Not Everyone Uses the Internet

Finally, there's a big portion of unemployed Americans who likely don't find it very easy to use the Internet in the first place. For some, paying their bills with their unemployment checks is hard enough, so the Internet might have been an expense cut. Others might just not be as Internet savvy. Some unemployed Baby Boomers, in particular, might have a hard time utilizing Internet websites to their full potential, since they haven't been immersed with the Internet for most of their lives like younger generations.

To be sure, the Internet does provide an advantage for those looking for work today. But even beyond the scarcity of jobs, labor mobility problems can often render national job searches useless. It will be interesting, however, to see if labor mobility improves as Americans begin to run out of their unemployment benefits. If the urgency to find a job is greater, then some of the obstacles to labor mobility mentioned above might not be as significant.