Underemployment Equilibrium

Not all equilibriums are good equilibriums. Take underemployment equilibrium, for example.

Underemployed folks are those who are working part-time or contract gigs when they would rather be working full-time, as well as workers whose skills are underutilized in their jobs. It’s when people have to settle for jobs that they don’t really want, because it’s not enough hours, or because it doesn’t match their skill set. (See: Underemployment.) Underemployment equilibrium is when the underemployment rate stays constant...a not-so-great thing for people. Plus, an underemployment equilibrium is likely to precede a recession if it’s negatively affecting GDP.

What’s a government to do about an underemployment equilibrium? Good question. Glad we asked.

Keynesians say “spend, spend, spend." Not surprising, as it's their answer for most problems. But hey, maybe they’ve got a point, since spending is what creates more business, higher GDP, and often more jobs.