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.
"It's unfortunate -- you get people with just a wealth of education that end up in call center roles or something," Ray said. "You will find a lot of people out there that I wouldn't call desperate, but they need to do something."
From a worker's perspective, the implications of underemployment are practical and emotional. Toliver, who has a master's degree in organizational development from American University, has cut back her cellphone services and how often she goes to the movies. Her student loans are in forbearance. And she waits.
Toliver was driving to a job interview recently when the employer called to cancel.
"It's depressing," she said. "It makes you wonder if you got the right degree, if you messed up or something."
Even though the government does not officially measure underemployment, many economists use as a proxy a statistic that includes 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, perhaps because they tried and gave up.
In November, that figure was 12.5 percent of the workforce -- the highest level since 1994, when economists began using the proxy statistic.
Economists and temp agency executives note that underemployment is cyclical, and that many people who are underemployed return to jobs in their chosen industries once the economy bounces back. That doesn't help in the here and now, though.
If workers lose their jobs, then find temp or part-time work at a much lower salary, they can sometimes still afford monthly mortgage payments by tapping into savings and investments. But if their money runs out, say, a year from now, that could cause trouble.
"It could be another contributor to the foreclosure problem," said Gus Faucher, director of macroeconomics at Moody's Economy.com. "When people have their hours reduced, they face more financial burdens and they are more inclined to give up and let the bank take over the house."
Shierholz said, "There's a lot of damage being done that we won't actually see play out for a while."
There are few regions of the country that will be spared, economists say.
When Whitney Warner, an Atlanta-area resident, left the Navy last year, she did so hoping to become a flight attendant for a major airline. She was scheduled to start training this summer, but now the airline, facing a tough economy, keeps putting her off, so she is answering phones and filing papers at a temp job.
Warner is living with family, spending very little money and using credit for purchases she must make. "In my rainy day fund, it's been raining a little bit," she said. Her savings will last her through March, she said, and if she runs out of cash, she might have to re-enlist in the Navy.
"I know I can live that long financially," Warner said, adding that she's "just happy to be working."
One of the oddities of Warner's experience is her expert status around the office where she's temping. The permanent employees have questions for her, not vice versa.
Said Warner: "They ask me questions about doing temp work," worried they could soon find themselves in her position.