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Underemployed: Definition, How It Impacts Workers & More

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To be underemployed means that you’re still an employee, but the job doesn’t fully utilize your skill set.

As a result, you’ll likely feel like you’re discarding your full potential.

Working hours are much less than regular employment, in turn, your income is comparatively low.

Plus, you’ll be bored.

That being said, understanding and measuring underemployment is critical to a nation’s economy.

Statistics in 2022 have shown that the US underemployment rate falls between 6.7% and 6.8%.

The higher the rate, the lower performing our nation’s economy and vice versa.

Stick around to learn more about what it means to be underemployed.

What Does Underemployed Mean?

Also referred to as disguised employment, underemployment means to have a job for a short or limited period.

For instance, seasonal workers and part-timers are considered underemployed.

Additionally, the term also touches on overqualified labor workers that have earned degrees but aren’t using them.

What is the Difference Between Unemployed and Underemployed?

Unemployment exclusively refers to those without a job or income source.

Meanwhile, underemployed workers do have an occupation, but it doesn’t allow them to use their full skill set.

What is the Difference Between Employment and Underemployment?

To be fully employed means that you have an adequate salary with sufficient working hours.

Underemployment refers to workers with relatively low working hours as well as low salaries that don’t fit well with their qualifications.

What is the Opposite of Underemployed?

The opposite of underemployed is over-employed.

Over-employment designates those who work more than regular full-time hours. In turn, they receive copious amounts of work.

Why Should We Be Worried About Underemployment?

The effects of underemployment can be felt throughout a nation’s economic health.

From low quality of life to reduced income per capita, underemployment leads to several negative impacts, which will be examined below.

Reduces Capacity to Earn Money

Working fewer hours translates to earning an infeasible income for multiple individuals.

Aside from that, retail workers make up a large portion of underemployed workers.

According to the Bureau of Labor Statistics, the average hourly salary of retail workers makes up about $15.35.

This signifies a low-wage income in states like California, which will likely lead to financial issues.

Affects Quality of Life

Low-income workers develop higher health risks, both mental and physical.

A couple of these mental health risks include depression and anxiety.

For this reason, hating the job you’re doing can produce detrimental effects.

Subsequently, integrated economic and public health policies can proactively address the issue.

Affects Society

High underemployment tends to create a negatively inclined domino effect.

With low income, consumers spend less.

Less spending leads to low consumer demand, in turn, slugging business development and the nation’s economic growth.

Overall, this stint can cause multiple repercussions in terms of societal well-being.

This includes income inequalities, which accrue lower population satisfaction.

Plus, the slump could cause a downturn in education as well.

What is an Example of Underemployed?

Underemployment can come in several forms.

For instance, an Uber driver with a Medicine degree faces severe underemployment.

Another example could come from a seasonal substitute teacher wishing to engage in a full-time teaching position.

What Are the Causes of Underemployed?

High underemployment is correlated with weak economic development.

The culprit could reside in multiple areas such as recessions, technological advancements, and job scarcities.

1. Recession

Economic downturn from recessions directly affects business outcome, where companies may shut down or downsize.

This could lead to getting fired since companies can’t afford to employ full-time workers.

With layoffs on the rise, workers then resort to part-time positions to make ends meet.

2. Scarcity of Jobs

Job scarcity is caused by lots of factors. One of which is the supply and demand of the job market.

For example, if the supply of engineers increases more than the needed demand, the job becomes more competitive among employees.

In turn, it becomes harder to nail the job despite meeting the employment criteria of the position.

3. Change in Job Markets Due to Technology

Artificial Intelligence and technological advancements have rendered numerous jobs automated.

From factory workers to data-entry clerks, the new age of tech growth has taken over multiple positions, leaving over 60 million workers in the hands of underemployment.

How Do You Know If You Are Underemployed?

Whether it’s the clear signs of getting pushed out, experiencing boredom at work, or diminishing team morale, underemployment shows lots of faces.

1. You’re Making Less Money Than You Need or Expect

If you find yourself making comparatively less money, then, chances are, you’re underemployed.

The best way to find out about this is to understand the job market income expectations in your field.

You can find the income information through online salary databases, and, if possible, ask your colleagues.

That way, you’ll have a better scope of what you should earn.

2. You’re Not Using Your Degree

If you have a degree in law, but your job is in no way shape, or form associated with law, then you’re underemployed.

Having said that, underemployment could also find its way into your career if you work in a position lower than your educational level.

An example could be if you have a law degree but work as a paralegal.

3. You’re Bored

Sitting idly by and doing nothing will undoubtedly lead to long bouts of boredom at work.

Working with little motivation to pull you through is tough. Especially if the work is unchallenging and routine.

4. You Work Fewer Hours Than You’d Like

Underemployment constitutes fewer working hours than average.

This could indicate little career advancement, reduced performance measurements, and a lack of team coordination.

5. Your Growth is Limited

Even though part-time work can provide you with certain skill sets such as self-management and other soft skills, its growth prospect is limited.

This is especially true if your work doesn’t correlate with your degree qualification.

6. You Feel Unmotivated at Work

With no challenge presented and nothing new to learn, motivation usually drifts off. You’ll become disengaged.

If you were to use your degree qualification knowledge, you may be more willing to work and find new methods of advancement, but that’s not the case here.

What is it Like to Be Underemployed?

Being underemployed may feel like you’re missing out on your true career path due to several reasons such as job scarcity.

Your day-to-day could feel redundant with no valuable input in career growth.

Fewer working hours lead to less challenge and potential for your progression.

In turn, you’ll likely feel undervalued, underpaid, and bored.

How to Deal With Being Underemployed

Luckily, you may not have to deal with being underemployed for the rest of your life. All you have to do is:

1. Negotiate a Raise or Promotion

For this method to work, you need to prove how valuable you are to the company.

To do so, compile the accomplishments you gained over the past few months and present them.

Before confronting your senior, be sure to complete the necessary research for the position’s salary.

We also suggest preparing a set of questions regarding compensation and benefits.

2. Look for Other Jobs

Rather than fasten yourself in this underemployed position, you’ll want to continuously be searching for alternative jobs.

Apply for the roles that’ll reflect best with your educational qualification.

3. Create Opportunities

Contrary to what you might think, opportunities can bloom from where you’re standing. Whether it’s through:

  • Networking
  • Learning
  • Goal-setting.

4. Network With Others

Fostering healthy relationships with your co-workers can lead to new opportunities. Those co-workers may know someone working in the same field you’re striving for.

When networking, social media can become a helpful asset in your process to find similar connections and interests.

5. Start a Side Business

45% of Americans have a side hustle, which allows them to gain adequate income.

That being so, you can start a side business to compensate for your low income.

On top of that, you’ll also be gaining more motivation and becoming more goal-oriented.

Wrap Up

Underemployment means that you’re working at a job with fewer hours.

The position also doesn’t correspond well with your educational qualification, making you overqualified.

The phenomenon is caused by recessions, job scarcity, and technological advancements replacing human work. With a limited career path, you’ll experience a slump.

To fight back, you can negotiate for a promotion, network, job hunt, and start a side business.

Let us know in the comments what you think about underemployment and if you have any questions.

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