UNH Study: Post-Recession Underemployment Remains High

This piece was reported by contributor Brian Wallstin

New research by the University of New Hampshire’s Carsey Institute sheds light on why millions of Americans might view the economic recovery as more illusion than reality.

In the aftermath of the 2007-2009 recession, the number of part-time workers in search of full-time jobs  — a category known as the “underemployed” — remains stubbornly high, especially among nonwhites and people younger than 30.

Justin Young, a doctoral student in sociology at UNH and a research assistant at the Carsey Institute, examined national underemployment trends from 2005-2012. He found that in the second year of the recession, 2009, the percentage of part-time workers who wanted full-time employment reached 6.5 percent of the labor force, representing nearly 9 million Americans.

In March 2012, well after the recovery began, underemployment had dropped, along with unemployment, but still averaged 5.7 percent, compared to about 3.25 percent in 2005.

Young says trends in underemployment track with the rise and fall of the jobless rate. But the underemployed typically don’t receive the same attention as those who can’t find any work at all.

“These are people who have jobs, so they are not reflected in the unemployment rates,” he says. “But this is another important economic trend that needs to be addressed.”

Young’s study doesn’t break down underemployment at the state level, but the New Hampshire Department of Economic Security collects data on people who work part-time for economic reasons, which the state categorizes as “underemployed.”

Between July 2011 and June 2012, an average of 35,300 people in New Hampshire, or about 4.8 percent of the labor force, reported working part-time while looking for full-time employment. That was down slightly from the previous two years, when the average was about 5 percent.

A broader category of part-time workers — those who usually choose to work less than 35 hours, but say they are doing it primarily for economic reasons — also reflects the underemployment trend in New Hampshire. That share of the labor force grew from about 1.7 percent of all employed residents in 2005 to 4.0 percent in 2011, with the majority of the increase occurring after 2008.

Annette Nielsen, an economist with the DES’s Economic and Labor Market Information Bureau, says the figures suggest that while New Hampshire’s unemployment rate of 5.7 percent is considerably lower than the national average, the recovery has been slow here.

“That this many people are looking for more work than they currently have says that it’s not really a great labor market,” she says.

Young’s study found that people between the ages 18 and 21 have been especially hard hit by the shortage of full-time work, as have women and black and Hispanic workers.

Education is also a key factor: college-educated workers were the least likely to experience involuntary part-time work, both before and after the recession. Meanwhile, those with no more than a high school diploma experienced a larger increase in underemployment during the recession.

Young says that the longer a worker is underemployed, the more difficult it is to find a better full-time job. Their skills, or potential employers’ perception of their skills, deteriorate or remain stagnant, he says.

Underemployment “has conse­quences for both the economy as a whole and the well-being of the underemployed and their families,” Young says, adding that economic policies to stimulate the economy should target underemployment as well as unemployment.


About StateImpact

StateImpact seeks to inform and engage local communities with broadcast and online news focused on how state government decisions affect your lives.
Learn More »