Matching people with available jobs is always difficult after a recession as the economy remakes itself, but the disconnect is particularly acute this time. since the recovery began in mid- 2009 , the number of job openings has risen more than twice as fast as actual hires. If the job market were working normally, openings would be getting filled as they appear. Some 5 million more would be employed and the unemployment rate would be \(6.8 \%\), instead of \(9.5 \%\) Are the 5 million workers who cannot find jobs because of mismatching in the labor market counted as part of the economy's structural unemployment or part of cyclical unemployment?

Cyclical unemployment is related to the natural ups and downs of the economy. It typically increases during economic downturns and decreases when the economy improves. For example, in a recession, businesses may lay off workers because there is less demand for their products.
When the economy starts to recover, businesses begin to hire again, reducing cyclical unemployment.

To get a better picture, imagine the economy as a roller coaster with ups (booms) and downs (recessions). During the down phase, people lose jobs (cyclical unemployment goes up). When the ride goes back up, people get hired again, reducing cyclical unemployment.

In the provided exercise, despite the recovery phase beginning, the job openings are not being filled. This indicates that the issue is not due to the cyclical trends but other factors, such as structural issues in the job market.

A job market disconnect happens when the dynamics between job seekers and job vacancies aren't aligned. This can occur due to various reasons:

• Skills mismatch: Workers may not have the skills that are in demand by employers.
• Geographical mismatch: Jobs might be available in locations where job seekers are not.
• Information asymmetry: Job seekers and employers might not have the necessary information to connect with each other.

In the exercise, the number of job openings has increased, but these openings are not being filled at the same rate. This points to a severe job market disconnect. The recovery phase has started, which means there are jobs available, but candidates are not being matched with these jobs efficiently. This disconnect often signifies deeper issues such as structural unemployment, where workers need reskilling or relocation to align with job market demands.

Mismatch of skills refers to a situation where job seekers do not possess the skills or qualifications required by employers. This leads to unfilled job vacancies and unemployed workers.

The mismatch can happen due to several reasons:

• Technological advancements: New technologies can make certain skills obsolete and require new ones.
• Educational gaps: Academia might not be aligned with industry needs, causing a gap between what is taught and what is needed.
• Industry shifts: Some industries might decline while others grow, requiring different skills.

In the exercise, it is implied that the recovery phase has seen job openings rise faster than hires. This suggests that workers don't possess the skills required for these new openings, resulting in structural unemployment. Solving this issue might require training and education programs to reskill the workforce to meet the current job market demands.