Ghost Jobs, Real Costs: How Taxpayers Fund Job Market Illusions

My siblings and I took very different paths with our careers.?

• I focused on hands-on experience during and after college for applied economics.?
• My brother chose to get his bachelor’s degree in business after his military career.?
• My sister received a double BA in urban studies and political science.

We have all been unemployed for over a year.

I know we’re not alone, and it’s not for a lack of trying. We’re all hearing the same advice: “Adjust your resume to fit the position,” “Don’t forget to write a cover letter,” and, even though it may take hours to do this for a single open position, “Don’t use ChatGPT to edit your resume or write the cover letter.”

However, 600–1000 hours later, applicants are still lucky to receive a boilerplate rejection notice in response. What gives?

Ghost Jobs

In May 2024, 650 hiring managers from the career site Resume Builder were surveyed. A staggering 40% of companies said they had posted a fake job listing in the past year.

The term “ghost jobs” gained prominence in early 2024, reflecting a growing awareness of employers posting job listings without genuine hiring intentions. This practice, though not new, became more noticeable as job seekers reported increased instances of applying for positions that remained unfilled or were removed without explanation.

If you watch the news, you’ll hear about companies posting fake job listings to create an illusion of growth, suggest to employees that help is coming, or, more darkly, that they are replaceable to boost productivity. Some recruiters admit to posting these roles to build a pool of résumés for “future hiring,” with some companies even going as far as interviewing candidates to maintain the ruse.

In a world where appearances often outweigh substance, keeping stakeholders impressed seems to have become the ultimate goal of doing business. If you’re like me, you’ve likely wondered whether companies are even more directly incentivized to post jobs they have no plans to fill.?

In this article, I’ll uncover lesser-known financial incentives for a business to post ghost jobs.?

Federal Programs

One clear financial incentive is the Work Opportunity Tax Credit (WOTC). This federal program offers employers tax breaks for hiring individuals from specific groups who face barriers to employment.?

It seems like an excellent idea, right? In theory, it is.

The WOTC provides a credit of up to $2,400 to $9,600 per qualified employee, depending on their target group and wages earned during their first year.

A business can claim the WOTC up to the amount it owes in federal income taxes for that year. If the WOTC amount exceeds its tax liability, the company can carry the unused portion back one year or forward up to 20 years.

But here’s the catch?—?to qualify, companies must demonstrate active recruitment efforts, including job postings. Employers may advertise jobs to attract candidates who qualify for tax credits, even if they’re uncertain about making an actual hire.?

How Federal Taxes are Funding Temp Jobs

ProPublica analyzed data from nine states’ WOTC applications and found that nearly a quarter of the jobs certified for the tax credit between 2018 and 2020 were with temp agencies.?

To receive the minimum tax credit?—?worth 25% of a worker’s wages?—?a company need only employ a worker for 120 hours, or about three weeks of full-time work. Employers can get the maximum credit?—?40% of a worker’s wage, up to $2,400?—?after just 10 weeks. The criteria do not specify employer type or job quality, and don’t forbid companies with a history of workplace violations from participating.

According to D.C. employment attorney Ayesha Whyte, employing a WOTC-qualified person for only one year gives an employer “just enough time to secure the tax credit and then terminate and replace them with another hire to receive the tax credit year after year. This would save an employer approximately 40 percent of an employee’s salary every year”.

State Grants

Many business owners and stakeholders feel that the burden of tax obligations constrains growth, limits operational flexibility, and diverts resources away from strategic investments.

But let’s say, for example, you’re operating a business in Virginia, an effective way to offset tax burdens is through a Virginia Economic Development Partnership (VEDP) grant. These grants provide financial incentives to companies that commit to creating jobs, maintaining competitive wages, and making capital investments in the state.?

Nowadays, job posting is inexpensive and easy, reducing the barrier to maintaining listings. However, meeting the job creation targets required by state grants can be challenging when the goal is to hire the most educated and experienced employee at the lowest possible salary. To demonstrate compliance and secure these benefits, many companies will post ghost jobs to provide the documentation needed to justify their participation in the program. Often, this documentation will provide for increased leniency from the state.?

How State Taxes are Funding Temp Jobs

For this section, I’m going to provide two examples. Spend a few minutes on Google and you’ll find hundreds more.

In 2007, Virginia secured a deal with Rolls Royce by offering a $56.8 million incentive package, including performance grants, funding for infrastructure and employee training, local tax breaks, and a new research and training center at the University of Virginia. This funding aimed to create hundreds of high-paying jobs and significant economic activity near Richmond. It is widely known that state taxpayers funded this deal, and many more like it.

Rolls-Royce built the facility in 2011. The performance grant paid Rolls Royce $5.5 million a year in 2014 and 2015 and $3 million annually between 2016 and 2023. However, despite these taxpayer-funded subsidies, the plant closed in 2021, laying off its (only) 280 employees.

Around the same time, North Carolina made a $260 million deal with Google to build a server farm in Lenoir. In October 2024, Google announced a planned expansion to the data center adjacent to its Lenoir campus. The assessed tax value of Google’s Lenior operation is currently about $1.2 billion. However, in exchange for a mere 30 new jobs, local officials have offered rebates of 50% for real property taxes and 85% for personal property taxes over 20 years.?

…30 F@&#$?& JOBS?!

P.S. Google’s owner, Alphabet, is among the world’s most valuable companies with a market value of $2 trillion and annual revenue of $307 billion last year.?

Federal Contractor Obligations

Companies that hold federal contracts are subject to regulations under Executive Order 11246, enforced by the Office of Federal Contract Compliance Programs (OFCCP).?

These regulations require Affirmative Action Plans (AAP) that outline their efforts to recruit and employ minorities, women, veterans, and individuals with disabilities. Employers may post roles to show they are actively recruiting from underrepresented groups, fulfilling their AAP obligations, even if they have no immediate intention of filling the positions.

Companies can provide evidence of compliance during OFCCP audits by maintaining records of job postings, applications, and outreach to diverse groups.?

Note: In a perfect world, regulatory bodies like the OFCCP would implement stricter guidelines on job postings and audit employer practices to ensure genuine recruitment efforts. However, this is not currently the expectation.

Additional Reasons Roles Go Unfilled (Dishonorable Mention)

Since we can’t blame 100% of ghost jobs on grants, here are a few more motivations to contextualize why so many job postings aren’t leading to actual hires.?

• Budget and Financial Constraints: The role may have been approved for recruitment, but delays in budget approval or financial uncertainty prevent actual hiring. Posting jobs allows employers to prepare for better economic conditions when they can afford to make the hire.
• Unrealistic Expectations: Employers may post jobs with overly specific or demanding criteria, resulting in no qualified applicants. However, they may keep the job open in case the “perfect” candidate appears.
• Preselection: Sometimes, the position is intended for an internal candidate or someone pre-selected for the role, but external posting is required by company policy or to give the appearance of fairness
• Market Research: Job postings can be used to gauge market conditions, such as the availability and salary expectations of talent in a particular field or location.

But for those who understand business owners' financial motivations, here is the main takeaway: The cumulative impact of tax credit incentives, compliance needs, and speculative strategies have inevitably resulted in a flood of postings that were never intended to result in hires.

And the worst part?

Those of us with income are funding these grants with our tax dollars, while the unemployed are paying for the false hope of opportunities that don’t actually exist.