Unemployed Versus Under-Employed

There is no need to define the term “unemployed.” Not only do all Americans know what that word means, they’ve probably actually been unemployed at some time in their life. If we had to explain unemployment to a classroom full of 8 year olds, we could do it very easily. If you work and have a job, you’re employed. If you don’t work and don’t have a job, you’re unemployed. Class dismissed.

Under-employed is an entirely different concept, and not so easy to grasp. Just think of it as “insufficient.” Someone might be employed part-time because they can’t find a full-time position. They would prefer to be working full-time , and even need a full-time position to pay their living expenses. They are working insufficient hours and making insufficient money. Some economists also consider anyone who is overqualified for their position to be underemployed. Someone who has a PhD and is working full-time at a job that only requires a bachelor’s degree can also be considered underemployed. In this case the person with the PhD is most likely working for less money than they could make if they found a job that would use their level of education.

Our country’s unemployment rate is in the neighborhood of 9.4%. But as of the end of April, the underemployment rate (which includes the unemployed) is 18.2%. That means that in addition to the 9.4% of unemployed, we have an additional 8.8% who are working, but not enough. One of the significant things about this number is that according to Gallup (you know those Gallup polls we always hear about) a nation’s economic success is more closely linked to its underemployment rate, not its unemployment rate. So when economists quote the unemployment rate and tell us that is declining, does it really mean we’re doing better?

The bottom line is that I think it’s important to question statistics, and to analyze where they come from and what they mean. We hear about the unemployment rate on a regular basis, but rarely does anyone mention that other section of people who may be falling just as far behind. We have a lot of people out there who are working, possibly even full-time, but not making enough to scrape by. Others are employed part-time and are searching for something full-time. Someone working part-time won’t show up as unemployed, but could very well be underemployed. These people aren’t affected by the reported unemployment rate and continue to struggle even if it declines.

If you find yourself part of either of the above statistics and don’t see the light at the end of the tunnel yet, you may want to sit down and speak to an attorney.  If your next step is to dip into your retirement account to keep up with your credit card payments or pay the mortgage on a house you can no longer afford, you owe it to yourself to find out what your options are.  We offer a free consultation where you can get the answers you need without getting yourself further into debt.

Submitted by:

Kerry Hammond, Esq.

Bankruptcy Attorney