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‘Underemployment’ Poses Particular Challenges for Young Workers

employment . / Credit: Job Search Image via Shutterstock

Unemployment isn’t the only problem facing young Americans. While 18.8 percent of workers between the ages 18 and 21 are unemployed, another 10 percent in that age group are underemployed, new research finds.

Underemployment is defined as part-time workers looking for full-time work or when workers are forced to work part-time hours because their hours were reduced involuntarily by their employer, said Justin Young, a doctoral student in sociology at University of New Hampshire and a research assistant at the school's Carsey Institute.

The prospect of finding full-time work is slightly worse for workers without a college degree . Young found that workers with at least a college degree were less likely than workers with just a high school diploma to have problems with underemployment.

"The least educated are also the most susceptible to being relegated to part-time work, thereby lowering their already lower-than-average wages," Young said. "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 also found that underemployment was slightly higher for workers in urban areas than it was for rural workers. Just more than 5 percent of young workers in urban areas were underemployed, while 4.8 percent of rural workers were underemployed.

"While on the decline, these rates have yet to return to their prerecession levels," said Young. "Moreover, as the recession and other economic forces keep older workers in the economy, openings for full-time jobs for younger workers might remain limited in the short-term."

Additionally, Hispanic, black and female workers were more likely than white male workers to be underemployed, Young found. The numbers do not improve much for workers under the age of 30. Among workers between the ages of 22 and 30, 7.2 percent are underemployed and another 10.5 percent are unemployed.

Overall, 14 percent of the U.S. labor force was either unemployed or underemployed in 2012. The nation's unemployment rate was 7.9 percent in October 2012, but an additional 6 percent of workers in the United States were also underemployed. Underemployment, however, has been slowly falling since doubling between 2008 and 2009 with the Great Recession.

Young says the impact of the employment situation for young workers cannot be overstated, especially when looking at the overall economic impact of underemployment and unemployment. 

"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.

"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."

Young's research was based on data from the Current Population Survey.

Follow David Mielach on Twitter @D_M89 or BusinessNewsDaily @bndarticles. We're also on Facebook & Google+

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