Phyllis Pooley serves as director of special projects with the University of West Florida Office of Economic Development and Engagement in Pensacola.
In addition to the standard unemployment rate, which essentially measures the success in finding a job for those that are actively seeking one, there are other methods that attempt to measure the quality of the jobs that are available and how well they match the workforce’s skills. When laborers have difficulty finding the type of job that utilizes their highest skills or when they cannot work the number of hours that they would like to, these workers are considered underemployed.
The most common definition of an underemployed worker is someone who is currently working a job that has a skill set that is below that of the worker’s own. For example, someone with a college degree in computer programming working in a grocery store as a clerk would be considered underemployed.
Chmura Economics & Analytics, a research and consulting firm based in Richmond, Virginia, has calculated this underemployment rate by comparing underemployment in the states against a national average.
Because this is a comparison to a single national average, they note that what appears to be underemployment in some cases may reflect higher standards for occupations in certain regions. For example, an occupation usually held by a person with a bachelor’s degree in one metropolitan area may typically be held by someone with a master’s degree in another metropolitan area.
It should be noted that this potential for “degree inflation” (i.e., the requiring of higher credentials than a job previously required or potentially requires because those willing to take the position possess them) is potentially caused, in part, by underemployment.
In the Chmura analysis, shown in the map below, a negative number indicates that the supply of high-skill workers is lower than the employer demand for that skill set.
Underemployment for high-skill workers by metropolitan statistical area
The numbers suggest that for Pensacola, medium-skill workers may tend to be underemployed as there is a surplus of workers with this skill set available, whereas in Asheville, North Carolina, high-skill workers may find themselves taking jobs that require lower skill sets. Areas that can align their workforce skills with employer demands can tend to reduce this type of underemployment.
Another form of underemployment is labor underutilization. The U.S. Bureau of Labor Statistics measures this quarterly and annually with its U-6 method. This method creates a percentage of underemployed workers using the traditional unemployment rate plus those that are marginally attached to the labor force, which includes discouraged workers affected by the job market and those persons who are employed part time for economic reasons.
These last workers are those who want and are available for full-time work but have had to settle for a part-time schedule. This measure is available at the state and national level and is based on data from the Current Population Survey.