Unemployment is a problem. We all know that.
But it’s not the only issue. It’s likely not even the main issue.
There are plenty of people working full-time jobs who are failing to make ends meet. Furthermore, since The Great Recession, we’ve seen a trend in overqualified people accepting jobs purely based on availability, not skill.
This is the makeup of underemployment.
Comparing Two Types of Underemployment
Most economists agree that there are two types of underemployment: not being able to find enough work and working a job that is below someone’s qualification.
Both types of underemployment are becoming a problem. Fortunately, the gig economy is helping, but we’ll get to that in a moment.
So let’s talk both issues…
- Inadequate Hours – This has always been an issue, and in many ways, it’s hidden. Unemployment numbers can look better when someone gets a job, regardless of whether it’s a full-time job or a part-time job. Not to mention the fact that some people need two full-time jobs, based on their level of qualification, and their lifestyle’s demand.
- Overqualification – It’s not that overqualification is a new thing, but it’s definitely more popular than ever. With the millennial generation, we’re seeing more and more people who were told to go to college. There’s nothing wrong with college, but when there is a sudden rush of college students who’s entire plan was “I’ll just go to college so I can get a good job,” instead of going with a definite plan and purpose, there’s going to be a lot of overqualification walking around out there, with skinny jeans and thick black glasses.
These are really two separate problems, but they both fall under “underemployment.”
Underemployment is the real issue.
Unemployment May Not Be the Real Problem
If the average person without a high school diploma applies to 10 different jobs, odds are, she is going to get one.
Getting a job isn’t the problem.
If a similar person finishes high school, gets a degree, and then applies for the same 10 jobs, there is a chance that he will get the same job. However, if he did some research and found a scarce field, he just upped his chances by about 1000% (Full Disclosure: I completely made that number up, but you get my point).
When people are getting minimum wage jobs and trying to feed their family on those jobs, they’re not showing up in the unemployment numbers. However, minimum wage isn’t designed to be enough to feed a family, it’s designed to be an income for someone who is still dealing with pimples as a major issue.
I’m not here to debate minimum wage, I’m simply saying that’s where we’re at right now.
If we wait for the government to solve our problems, we’ll be dead long before we got what we wanted.
We’ve got to tackle this ourselves. Head on.
Underemployment by the Numbers
Last month, the underemployment rate was just over 13%.
Compare that to the unemployment rate of 4.6 last month.
Of course, we have to be fair. It’s not easy to track underemployment, and since it has multiple definitions, the numbers may be off. But that’s not totally untrue about unemployment.
Unemployment can be a mask, especially when the employed are highly underemployed. Just because unemployment numbers decrease, that doesn’t mean people are actually doing any better. In fact, finding some employment can often reduce or completely stifle any benefits people are receiving while they’re unemployed.
It’s a catch-22, really.
When it comes to the numbers, it’s really hard to get completely accurate. The fact remains that unemployment numbers are lower than they have been in years, but underemployment is also more real than ever.
There is a solution. The gig economy is making some progress in this area.
How the Gig Economy is Helping Underemployment
Underemployment is here in full force, but the gig economy may be a huge chunk of the answer.
The entire purpose behind the gig economy is to provide more employment, but not full employment. It’s not that it can’t be full employment, but it’s mostly supplemental income, which is an answer to underemployment.
Companies are starting everyday that allow you to do the things you normally do (drive, shop, etc.) or use the things you already have (your home, equipment, etc.) and profit from it.
Companies like Veryfier, Uber and Lyft may be the start of fixing this.
What do you think would be the biggest fix to underemployment? Think about it.