Rising Underemployment Contributes to Effect of Jobs Slump

A man who looks at job listings at the Employment Development Department in San Francisco. Employers slashed 533,000 jobs in November, the most in one month in 34 years.
A man who looks at job listings at the Employment Development Department in San Francisco. Employers slashed 533,000 jobs in November, the most in one month in 34 years. (By Jeff Chiu -- Associated Press)

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[Less than Fully Employed: To measure underemployment economists use statistics that include the total number of unemployed workers, people who work part time when they would prefer full time, and people in the workforce not seeking jobs.]
By Michael S. Rosenwald
Washington Post Staff Writer
Saturday, December 6, 2008

Not long ago, Kim Toliver was making a nice living as a consultant. Today she is an administrative assistant, clocking in at a temp job and making 20 percent of her old salary.

"I guess you could say I'm also in the middle of a strategic job acquisition process," said Toliver, 37, of Prince George's County. "I'm trying to do better."

The nation's unemployment report, released yesterday, was even worse than many economists had feared. But some say it was also incomplete. Workers like Toliver who are stuck in jobs for which they are overqualified went largely unnoticed.

In one of the worst recessions since at least the early 1980s, economists say, the ranks of the country's underemployed workers are growing. They include not only skilled laborers who are working in unskilled jobs, but also workers who are seeking full-time employment yet have had to settle for part-time alternatives.

Their misfortune, experts warn, is the economy's misfortune, too.

"It's a huge disservice to the economy, in that it means there are highly productive, hardworking people who are not maximizing their potential," said Heidi Shierholz, a labor market economist for the Economic Policy Institute. "They cut back on their consumption. That reduces demand. It's a downward spiral. It's a huge drain on the economy."

The government does not count some types of underemployed workers -- those who are overqualified for their current work, for instance. But it does count people who are working part time when they would prefer full time. That count has jumped by 2.8 million in the past 12 months, to 7.3 million.

There are people in a worse position. In all, 10.3 million were reported unemployed in November, sending the nation's unemployment rate to 6.7 percent, the highest level in 15 years.

But some economists insist the widespread attention paid to that figure is misplaced.

"For whatever reason, the focus has been on unemployment instead of this broader measure," said Christine Owens, a worker right's advocate and executive director of the National Employment Law Project. Underemployment "is a much more accurate measure of what the economy is really like for people."

Temp agencies say they are seeing an uptick in the number of workers with MBAs, backgrounds in finance or in the mortgage industry -- people who are willing to settle for significant cuts in pay just to pay their bills, according to Chuck Ray, regional director for Manpower, one of the nation's largest temp agencies.

Some end up as paralegals or administrative assistants, others find work in customer service.

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© 2008 The Washington Post Company

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