Definition of underemployment
1 : the condition in which people in a labor force are employed at less than full-time or regular jobs or at jobs inadequate with respect to their training or economic needs
2 : the condition of being underemployed
Recent Examples of underemployment from the Web
Work stress was measured by an analysis of average length of workweek, commuter stress, unemployment and underemployment rates and income growth.
Much like the residents of other urban ghettos around the country, the people of the Central Ward faced unemployment, underemployment, poor housing, substandard schools and daily harassment from a local majority-white police force.
Experts say historic underemployment and a foreclosure crisis that hit black communities hard are among the reasons why African Americans are missing out on a quintessential part of the American dream.
Unemployment dropped last month to its lowest level since 2001, yet wage growth is below levels seen in the late stages of previous economic expansions and underemployment remains above the lows of the previous cycles.
But according to a United Health Foundation's assessment, Alabama's underemployment rate is around 11.2 percent -- more than the national average 10.4 percent, but still its best number since 2009.
The broadest measure of joblessness, the underemployment rate, dropped to 8.4 percent, bringing its decline since January to a full percentage point, a move highlighted by Gary Cohn, President Donald Trump’s chief economic adviser.
Yellen, for her part, hasn't ridiculed the unemployment rate, but highlights underemployment as a key gauge.
Yellen, for her part, hasn’t ridiculed the unemployment rate, but highlights underemployment as a key gauge.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'underemployment.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of underemployment
Financial Definition of UNDEREMPLOYMENT
What It Is
Underemployment occurs when one does not have a job that is full-time or that reflects his or her training and financial needs. It is not the same as unemployment, which is the percentage of employable people in a country’s workforce who are over the age of 16 and who have either lost their jobs or unsuccessfully sought jobs in the last month and are actively seeking work.
The formula for underemployment rate is:
Number of underemployed / Total labor force
How It Works
For example, let's say that John Doe graduates from college with a degree in electrical engineering, but the only job he can find is a retail sales clerk. John Doe has a job, so he is not unemployed, but his job does not reflect is skill set, and so he is underemployed.
It is important to note that underemployed is different from not working. Some people may be in school full time, working at home, disabled or retired. They are not considered part of the labor force and therefore are not considered unemployed. Only people not working who are looking for work or waiting to return to a job are considered unemployed.
Some level of underemployment will always be present in an economy as industries expand and contract, as technological advances occur, as new generations enter the labor force, and as long as workers can voluntarily search for better opportunities. This is why most economists agree that there is a natural rate of unemployment in the economy (usually 4% to 6%), and accordingly there will be a natural rate of underemployment as well.
Why It Matters
Underemployment may be most affected by the number of youthful workers in the labor force, who tend to experience more underemployment as they change jobs and move in and out of the labor force, and public policies that may discourage employment or the creation of jobs (such as a high minimum wage, high unemployment benefits, and low opportunity costs associated with laying off workers).
Employment is the primary source of personal income in the U.S. and thus a source of economic growth. This is primarily why underemployment, which is a lagging indicator, can provide considerable information about the state of the economy and about particular sectors of that economy. For example, high underemployment is generally indicates an economy is underperforming or has a falling gross domestic product, suggesting weak labor demand, unproductive labor policies, or mismatches between the demands of workers and employers. Low or falling underemployment may signal increases in the supply of whatever the new jobs produce, which suggests an expanding economy.
Learn More about underemployment
Britannica.com: Encyclopedia article about underemployment
Seen and Heard
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