Underemployment Affecting Economy

Compiled By Yaffa Klugerman
December 1, 2009

A rising number of workers in the nation are considered to be underemployed. In other words, they have been forced to take part-time jobs even though they are seeking full-time work, or they are overqualified for their positions.

The San Diego Business Journal reports that according to the U.S. Bureau of Labor Statistics, the national unemployment rate was 10.2 percent in October--which includes people who are registered, receiving unemployment benefits and are actively looking for jobs. But the figure rises to as high as 17.5 percent including underemployed people.

"These workers aren't earning to what their full potential is," noted Alan Gin, an economics professor at the University of San Diego who was quoted by the Business Journal, "and because they have less income, they also have less spending power."

Robert Reich, a professor of public policy at the University of California at Berkeley, noted that this lack of spending is clearly taking its toll on the economy. "We are subjecting millions of people to a standard of living below that which they could achieve if the economy were at full capacity," he was quoted as saying in The Wall Street Journal. "Underemployment means that many more people who can't spend as much as they otherwise would."

Janette Oswald of Dallas is one such example. The Dallas Morning News reports that after being laid off from her job as director of asset protection for a restaurant company, she eventually landed a part-time job as an internal audit consultant.

"I'm looking, and I would love to have a full-time job," she told the Morning News. "I think I have a pretty good resume, but I can't even get interviews."

Julia Patrick had a similar experience. She told the Business Journal that after completing a fast-track doctoral program for cell and molecular biology, she felt certain she would land a lucrative job. But nothing was available, and eventually she took a lower-rung position as a regulatory compliance specialist with Jenny Craig, Inc.

"It's discouraging," she was quoted as saying in the Business Journal. "I've applied for everything from the lowest lab rat job to executive positions. I've been called to a number of interviews, and people like me, but so far I haven't gotten anything."

The Wall Street Journal notes that the underemployment situation is expected to improve in time, but it could take years. Heidi Shierholz, who studies underemployment at the Washington-based Economic Policy Institute, noted that as the economy recovers, companies will likely restore more working hours to those who are already employed rather than hiring more people. And those who have taken on part-time work will consequently have less impressive resumes as a result.

"If you have a string of jobs beneath your skills," Shierholz told the Journal, "it erodes your resume and marketability."

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