The U.S. labor market had 10.1 million job openings at the end of June, according to the Bureau of Labor Statistics. But 8.7 million workers were still unemployed in July. If there are so many more openings than jobseekers, why are there unemployed workers left?

Every bucked economic trend and difficult question of the last 17 months—including why so many jobs are unfilled—has the same explanation: the pandemic. In this case, it is creating what economists call a “search friction.” And, like the virus, this is a new variant we've never experienced before and don't fully understand.

All markets have friction. A friction is anything that prevents a buyer and seller from transacting instantaneously. If a shopper has to go to multiple stores to find an item, or comparison shops before purchasing, or doesn't live close to a store carrying the product—all of these are examples of frictions. In the labor market, where the shoppers are employers and the sellers are workers, a friction creates slower hiring and higher unemployment.

The labor market has lots of frictions, but they aren't all necessarily negative. A healthy savings account that enables a worker to take time to find the right job, rather than the first job available, is a friction. The need to live near aging parents, which puts a geographic boundary on a job search, is a friction.

When governors in 25 states ended the $300 federal add-on to unemployment checks months early, they didn't use the term, but they too were addressing a known friction: public sources of financial support to unemployed workers.

The pandemic is still introducing new frictions. In its Job Seeker Survey, also collected in June, the Indeed Hiring Lab found that the top reasons for not searching too hard or urgently for a job are COVID-19 concerns and childcare demands.

How does this play out? An individual worried about contracting COVID-19 might be more hesitant to take a job if vaccination rates are low, cases are spiking, customers are not required to wear masks, or a combination of all three. An individual worried about the virus might also have a difficult time finding a job with preferred working conditions, such as the share of coworkers who are vaccinated or the ability to work at a distance from others.

Read the full article about job employment beyond COVID-19 by Kathryn A. Edwards at RAND Corporation.