Monday, December 6, 2010

The True Underemployment Rate

A more accurate way to compute the underemployment rate would include:
  • Unemployed and actively looking for work (currently 9.8%)
  • Discouraged workers. Those who'd like to work but have given up. (another 10%)
  • Underemployed. Those working part-time who'd like to work full time (another 10%)
  • Misemployed job level. Those working at a lower-level job than they're qualified for (I estimate another 15%)
  • Misemployed interest area. People who dislike their field of endeavor but felt forced to be in it because of a lack of jobs in a field they're interested in, for example, the arts. (I estimate another 20%).
In sum, I believe that well over half of Americans are not doing work they're satisfied with. (And that doesn't count the many people who don't like something about their particular job: their boss, coworkers, the employer's ethics, etc.)

What to do to reduce the underemployment rate?
  • A national jobs database so employers and employees could more efficiently be matched.
  • Career advising starting in the 8th grade so more people could, early on, identify a well-suited career goal.
  • A public service announcement campaign encouraging people to hire tutors for their kids, personal assistants for themselves, and companions for their elderly relatives. That would create millions of pro-social jobs that currently don't exist.
  • Have all high school students take a course in ethical entrepreneurship. People with new business ideas create jobs while meeting the citizenry's unmet needs.


Jeffrie said...

Interesting categories you have here. Count me in the "misemployed interest area."

I have begged, more than once and more than one person, for more interesting work at my job, as I have more time on my hands than work to do most of the time. (The exception is now, during the holidays.) I've been ignored. Besides the annual holiday rush, the most I've gotten in extra work recently is busywork that another worker abandoned or ignored, and the only attention I've gotten recently is negative, when it was perceived that I had a bad attitude.

While I know full well that this is better than nothing, it's getting really difficult to say that. How many employed people wish they had MORE work to do? Usually it's the other way around. I feel like I'm one of those rubber-room teachers, getting paid to sit around and do nothing for most of my time.

Marty Nemko said...

Jeffrie, do you think it would be helpful to use the career-finding section of Cool Careers for Dummies?

Jeffrie said...

Helpful? It might be. On one hand, it is better than doing nothing. On the other hand, this is the third field I've gone into that's ended up being a dead end. At this rate, I'll forever be on the entry level.

It may be that the problem is me, not the fields I choose.

Marty Nemko said...

Jeffrie, I failed as a drug counselor, and school psychologist before I found something I could succeed in. And even today, I have my failures. Resilience is important.

DaveinHackensack said...

"A national jobs database so employers and employees could more efficiently be matched."

This doesn't already exist?

"Career advising starting in the 8th grade so more people could, early on, identify a well-suited career goal."

High schools already have career days, guidance counselors, etc. Can't see starting in 8th grade with this making much of a difference.

"A public service announcement campaign encouraging people to hire tutors for their kids, personal assistants for themselves, and companions for their elderly relatives. That would create millions of pro-social jobs that currently don't exist."

Highly doubtful. People who can afford to hire tutors, etc. already do. People who can't (most Americans) don't.

"Have all high school students take a course in ethical entrepreneurship. People with new business ideas create jobs while meeting the citizenry's unmet needs."

Most people aren't cut out to be entrepreneurs, and the government already does too much to encourage the creation of low-productivity small businesses.

Anonymous said...

Keep in mind that economic "bubbles" lead to not only the misallocation of money, but also the misallocation of jobs. For example, consider how many people went into real estate and related jobs during the housing bubble, from mortgage brokers to construction workers. So job creation should focus more on sustainable areas. Even better, managing the economy to avoid these bubbles by not loading up on debt.

At the same time, it's been said by others, but one key factor in the unemployment rate staying persistently above 9 percent is the housing crash. People can't relocate to find new jobs because 1) if they find jobs out of town, they can't sell their homes at all or sell their homes for what they paid for them; 2) if they sell their homes at a reasonable price, they can't find a comparable affordable home where they're moving to; 3) if they find a comparable affordable home, they can't get financing; 4) if everything else works out, they have significant relocation expenses, which companies used to cover or help with, but not as much. In short, the housing crisis has made unemployment worse by hampering labor mobility.

R J said...

A very information mini-essay, one to which I have linked on my Facebook page, that it might get more publicity.

The job situation is very similar in Australia, where anything to do with welfare payments is a matter of the federal government rather than of the state governments, and where the system is fundamentally a matter of statistical fraud. That's to say, in Australia, anyone who has more than a few hours' paid work per week is counted as "fully employed"! (This is so that the nation's official unemployment rate can be kept artifically low.)

I speak as one who has done his best for years to survive on a piece-work basis in a hopelessly casualized workforce, where the de facto discrimination against white heterosexual Christian males is, if anything, even worse than I gather it is in the States. (Naturally I was glad that Dr. Nemko's "Dummies" book on careers - which I have read many times with enjoyment - mentioned this sort of discrimination.) At present, I, unlike Jeffrie, would welcome the opportunity of being bored at work!

DaveinHackensack said...


Do you live in the same Australia that has an unemployment rate of ~5.2%? The one where pipe fitters in Perth make more than physicians, thanks to the mining boom?

R J said...

Alas, DaveinHackensack, those days are long, long gone. It was like that briefly in the 1980s (though even then there were pockets of severe unemployment elsewhere in the country) but I don't know of anywhere in Australia since the 1990-92 recession where that has occurred.

In my previous comment, "very information" should of course have been "very informative." My bad.

Lita Perna said...

Additional ideas: Have students explore careers by following (shadowing) a seasoned worker for a day to learn realities not taught in schools.
Create apprenticeships for most careers instead of wasting class years.

ST said...

Yeah, life sucks and most of us have to work for a living (or try to). I suppose there are very few who are in bliss at their jobs. Part of it may just be attitude and how tolerant one is in a given situation, too.

I've been at more than one company that tried to implement a jobs database with no success, so I don't see the nation actually doing it.

I consider myself one of the lucky ones. I've searched for the "ideal" job in my younger days, but partly with looking at my job as something I took ownership of, and also as an income stream (treat it like my "business"), that has helped tremendously in not only recognizing that I am using a lot of my natural talents after all, but also that a job and it's situation doesn't have to be perfect.

The other "lucky" part is that I'm paid very well (technical business analyst) for working about 45 hours a week and there are some lull times (but also some very peak times). Have never been laid off (knock on wood), so the income stream remains stable. I have a good boss, lots of paid time off days (vacation/sick combined), and a fairly liberal telecommuting from home policy (up to two days a week).

Anonymous said...

In response to Jeffrie:

I really doubt the problem is you. What I've read before, about 10 years ago, is that people who are currently 45 and under (Gen. X like me, and millennials) - many of whom are women and/or minorities, incidentally - will find it difficult for a long time to advance professionally due to a "glut" of Baby Boomers in the workplace. From what I've seen and experienced over the years at different jobs, this is definitely true. My experiences at work have been very similar to yours, though I have a strong academic background and have had some so-called "good" jobs.

It may only start to get better for younger workers when more Boomers start retiring – and they will sooner or later (even if they want to keep working) due to the combined effects of health problems and age discrimination, unfortunately for them. (I've seen this myself. Various coworkers who were not in their older years passed away due to serious illness or retired on disability, leading to more turnover than expected in recent years.) I read recently that 10,000 Baby Boomers turn 60 each day.

Workplace demographics can be tough for those in Gen. X, because the generations after and before us are so large: each about 80 million, compared to the 50 million in Gen. X. I've read various articles about how Gen. X has felt ignored both in the workplace and in society.

(By the way, I'm pretty sure the book in which I read about the demographics I mentioned in the first paragraph was a career counseling book published in 1998 titled 'The Best Jobs For the 21st Century, Third Edition', by Krannich and Krannich - two PhD's.)
I've also talked with various people who have little work to do every day - and usually seem to feel guilty, or at least very conflicted, about this. I don't know how all this underutilization could have happened, except perhaps that widespread automation is reducing the need for people – though I heard about and saw this even pre-Internet, "way-back-when."

I've wondered sometimes if moving to another country with a higher standard of living is the answer. (Check out the UN Human Development Index ratings.) I know that Europe is going through a lot of economic upheaval these days – but supposedly Europe needs a lot of immigrants in the coming years to support its aging population. (A few million per year, supposedly, just to keep up its standard of living!) The same is true of Canada, but I've also found some online forums complaining about a lack of white-collar, professional jobs there for educated immigrants. So, my question for anyone especially in the older half of Generation X (40-45 years old): Is it better professionally to be "old" by American standards, or young by European ones?

Meanwhile, a lot of people who are bored at work - and there seems to be plenty of them - go for more and more degrees (additional undergrad degrees, and/or grad degrees). Same as in any developing country such as India or China, nowadays it seems to be that you have to have higher and higher levels of education to get smaller and smaller (less prestigious, less interesting, more routine) jobs. And then you can feel like you’ve been scrutinized to death just to eventually get a job that could bore you to death.

I don't mean to sound too grim, but it's hard not to be disillusioned.

Lita Perna said...

Marty, This is from the American Counseling Association. It might help someone.

From the Executive Director: Is the pipeline too full?
By Richard Yep
A few years ago, we might have received a few calls each month at ACA headquarters from members who were having a tough time finding a job. Since that time, the frequency (and desperation) of these calls has increased significantly. For many, the tough economy has resulted in fewer new jobs. Related to this is the fact that counselor education programs continue to graduate caring, compassionate and dedicated individuals who, after a number of years and thousands of dollars in student loans, simply can't find gainful employment in the counseling field.
The ACA staff and I hear from counselors (new as well as midcareer professionals) willing to relocate and take lower pay just to find positions in which they can impact people's lives. Unfortunately, although some positions are out there and occupational outlook data suggest counseling is a growing profession with career possibilities, not enough openings currently exist for those who are so eminently qualified.

Marty Nemko said...

Yes, universities are a big part of the problem. They care not a whit that their graduates can't find jobs. They just want maximum tuition money and so will generally accept as many students as will come, especially if they don't require any of the college's financial aid money.