Understanding Underemployment | DCR Workforce Blog

Understanding Underemployment

It was Ronald Reagan who said – recession is when a neighbor loses his job. Depression is when you lose yours. What if you had a job, but your job did not pay you enough, it was unsuitable to your skills or allowed you to work for short periods only, forcing times of inactivity on you and robbing you of the opportunity to bring in earnings commensurate with your capabilities? What if even your neighbor had a very similar story to narrate?

When people get laid off and fail to find a job which pays them the equivalent of their earlier pay rate – they try to avail some temporary loans to stay afloat and keep on searching for a suitable job. Then they are finally constrained to settle for a lesser pay rate to stay afloat. But the credit lines established on the higher pay drawn previously along with the temporary loans availed make it almost impossible for them to maintain their standard of living. Meeting the loan re-payment schedule becomes an impossibility and they are inevitably forced into bankruptcy. Today, people are more aware of these matters than ever before and do not hesitate to take up one or more small jobs – rather than trying to hold out for the bigger and better deal.

Like everything else in life, nothing is black or white; there are so many shades of grey. Underemployment is such a shade of grey between employment and unemployment! We find that temporary, casual labor, day labor, part-time, lease and independent jobs grow and grow though these workers do not qualify for any benefits or unemployment insurance. Though considered as employed, a few among them cannot really be said to be fully employed. These are the underemployed, whose skills, education and experience are more than what is required by the role! It may or may not be something as drastic as a trained engineer finding work as a fork-lift operator or a doctor becoming a bus driver. Such underemployment is difficult if not impossible to track and report. Being forced to work part-time due to unavailability of work opportunities is also considered underemployment and can be tracked better.

After surveying over 20000 adults in the US, Gallup has released shocking estimates this week which put underemployment (which includes unemployment, which stood at 9.7% in January) in the US at 20% – which works out to about 30 million Americans. The Labor department puts this number at 16.5%, because it factors out temporary seasonal changes and also considers anyone over 16 to be employed, if they said they were not actively seeking employment. More Americans, especially in the older age groups are being forced to declare bankruptcy, with a new definition for success emerging as – gaining eligibility to claim social security without having to declare a bankruptcy, which itself is a costly affair – what with the need to take mandatory courses before and after declaring one.

It is time all of us remembered the wise words of another American President, Franklin D Roosevelt, who said,True individual freedom cannot exist without economic security and independence.People who are hungry and out of a job are the stuff of which dictatorships are made.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.