Unemployed face tough competition from the underemployed

Filed in Gather Business News Channel by on September 4, 2011 0 Comments

The unemployed face tough competition from the underemployed, as if their situation wasn’t tough enough. When companies finally start ramping up their workload, they will add hours before they add staff. There are also those who aren’t counted in the unemployment figure that makes the headlines, the one that stayed at 9.1 percent this month, because they’ve given up looking for work. There are some estimates that job growth could stay weak for 2–3 years simply because of the capacity for extra hours from the part-timers.

One way of keeping an eye on this is to look at the different measurements of employment and the lack thereof done by the Bureau of Labor Statistics (BLS). U-3 is the measurement that makes the papers being total unemployed as a percentage of the civilian labor force. U-4 adds discouraged workers, defined as such because they hadn’t looked for work in 4+ weeks because they believe there are no jobs available. U-5 adds marginally attached workers, where the reason for not looking for work could be anything. U-6 includes part-time workers.

To get a sense of the competition for the unemployed mentioned in this article, U-6 over the last year or so has exceeded U-3 by 7 percent. That means that when the economy picks up enough, the unemployed are going to see their competition close to double.

In addition to the need for a sufficient stimulus to accelerate the recovery, there also needs to be a crack-down on the execrable practice of job ads that explicitly discriminate against the unemployed. Given that many of the unemployed ended up that way because of the crash and the consequent Great Recession, there is no basis for a general inference that the jobless are less qualified.

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