NEW PAPER: Underemployment far more prevalent in U.S. than official count; Findings have major implications for unemployment benefits, economic policymaking

August 6, 2020

Washington, DC Today, the Center for Law and Social Policy(CLASP) and Groundwork Collaborative released a paper that shows there are more underemployed part-time workers than we realize and underemployment is higher among certain workers and jobs, which has several harmful effects that policymakers should understand—now more than ever. 

Written by Dr. Lonnie Golden, Professor of Economics and Labor-Employment Relations at Penn State University and Jaeseung Kim, Assistant Professor of Social Work, University of South Carolina, the paper, “The Involuntary Part-time Work and Underemployment Problem in the US,” introduces a new, more accurate way of measuring the extent of underemployment among part-time workers. The report shows that the rate of underemployment in 2016 was double the rate of the commonly referenced Bureau of Labor Statistics measure. 

“As with unemployment, escalating underemployment is a scourge of a deteriorating labor market, and it is time for policymakers to see the full extent of this pernicious economic problem,” said Dr. Lonnie Golden, co-author of the new paper. “This new research should bring a more comprehensive understanding of the challenges faced by the underemployed and involuntary part-time workers—and what needs to be done to support them and help them move into full-time work.” 

“In today’s pandemic and economic crisis, employers have more ability to dictate how the labor market is structured, which further entrenches systemic racism and economic inequality. This paper includes a number of policy recommendations that were important before the pandemic and are even more critical now,” said Pronita Gupta, Director of Job Quality at CLASP. “Today’s report quantifies trends we have been seeing for some time and underscores why we need a robust set of job protections that center on equity including a higher minimum wage, worker access to paid sick days and paid family and medical leave, and fair and predictable scheduling practices. The pandemic has proven why we need national standards.” 

“This paper highlights a major economic weakness that policymakers have ignored for far too long: underemployment is deeply pervasive, and it is the result of declining worker power and systemic racism and structural sexism in the labor market. It’s creating instability and insecurity for workers and families in our already-weak economy,” said Sapna Mehta, Director of Policy and Research at the Groundwork Collaborative. “Underemployment is especially problematic in fast-growing industries like retail, hospitality, and food service that employ low-wage workers – disproportionately Black, Latinx, and women – who are now also at greatest risk in the COVID-19 crisis.”

Read the full paper here.

Executive summary 

More than 10 years after the Great Recession of 2007-2009, media stories were reporting a healthy, robust economy with lower unemployment and underemployment. The U.S. Bureau of Labor Statistics (BLS) uses a single indicator of underemployment: those who work part-time hours but who want and are available to work full time. However, this single statistic has masked the breadth, severity, and persistence of underemployment within the U.S. economy. The authors create a broader, more inclusive measure of underemployment, which includes any part-time worker who prefers more work hours, not just those who want a full-time job.

The report’s measure of the rate of “part-time underemployed” in 2016 is from 8 to 11 percent of total employment in the United States, which is double the rate of the narrower BLS measure. Among the historically marginalized and less economically secure workers of color, the rate is about twice as high as among white workers. Indeed, among all part-time workers in the United States, as many as four in ten want to work more hours. Such involuntary part-time work is climbing steeply in 2020 due to the crisis in labor markets spurred by the COVID-19 pandemic recession. This report provides clues for the likely incidence and harms of this more widespread underemployment and what could be done to curb it and its impact.

About CLASP

The Center for Law and Social Policy (CLASP) is a national, nonpartisan, anti-poverty organization advancing policy solutions for people with low incomes. CLASP works with policymakers and stakeholders at the federal, state, and local levels to inform and develop solutions that directly address the barriers people face because of their race, ethnicity, and immigration status.

About Groundwork Collaborative

Groundwork Collaborative is an initiative dedicated to advancing a progressive economic worldview and narrative. We are committed to collaborating with a diverse array of partners to advance an economic system that produces strong, broadly shared prosperity and abundance for all people, and not just a wealthy few. Our work is driven by one core guiding principle: we are the economy.

We work with economic policy experts, progressive movement leaders, and activists on the front lines of progressive causes in communities across the country to:

  • Develop and advance a progressive economic worldview
  • Collaborate and foster new ideas, and develop new pathways to share information
  • Break down issue silos, support and amplify each other’s work, and show up for one another on critical economic issue campaigns.

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