Unemployment rose quickly after the financial meltdown of October 2008, when a normal recession turned into the Great Recession. Joblessness has fallen slowly and many who have jobs have fallen into the category of “underemployed.”
That means they aren't able to find a job with full-time hours or one that pays very well. One group in particular is heavily represented among the underemployed -- younger workers.
“While on the decline, these rates have yet to return to their pre-recession levels. Moreover, as the recession and other economic forces keeps older workers in the economy, openings for full-time jobs for younger workers might remain limited in the short-term,” said Justin Young, a doctoral student in sociology at the University of New Hampshire and a research assistant at the Carsey Institute.
Young's research finds workers aged 30 and under are particularly affected. Usually they are just beginning careers and have borne the brunt of job cuts.
Untapped economic capital
“These workers represent a source of untapped economic capital, as their jobs do not allow them to maximize their output or skills. This has consequences for both the economy as a whole and the well-being of the underemployed and their families,” Young said.
Young people without a college education are most likely to be relegated to part-time work, lowering their already lower-than-average wages. Those with no more than a high school diploma had the highest rates of involuntary part-time employment and experienced a larger increase in this form of underemployment during the recession,” Young said.
Young found that underemployment, or involuntary part-time work, doubled during the second year of the recession, reaching roughly 6.5 percent in 2009. This increase was equally steep in both rural and urban areas.
It's not easy being under 30
Workers under age 30, as well as women, black and Hispanic workers, experience higher levels of underemployment. Underemployment is strongly linked with education, with the least educated workers experiencing higher rates of underemployment compared with more highly educated workers. This relationship is somewhat weaker in rural places.
“The longer workers are underemployed, the more difficult it becomes to move into better jobs as their skills and employers’ perceptions of their skills deteriorate or remain stagnant,” Young said. “Further, if those entering the job market bear the financial ‘scars’ of the current recession for years to come, economic recovery may be that much slower and the quality of life for these workers lower.”
While policymakers try to devise ways to reduce unemployment, now just under eight percent, Young said efforts should also be made to reduce underemployment.