Underemployment is the Bad News Bears of econ. What’s worse is that, in the U.S., it’s becoming more and more of a problem in the long-run for a variety of reasons.
Underemployment refers to the state of affairs where would-be full-time workers are only working part-time, or where workers' skills are being underutilized in the economy.
Why is underemployment becoming more of a problem? Well, the biggie: robots are taking our jobs. The U.S. has been losing manufacturing jobs for a long time now, leaving many people unemployed, dazed, and confused. Professional service jobs are being replaced with A.I., and just good internet user experiences. See LegalZoom.com and Houzz.com for details. Imagine how many basic lawyers and decorators they'll be replacing in the next decade.
With the near-future onset of driverless cars replacing the entire industry of long-distance truck drivers, many blue collar jobs are disappearing. Other white collar jobs at risk: accounting, administrative tasks, writing articles…even writing music (as if that's a legitimate industry for the 347 people who actually make a living doing it).
If you think teaching everyone to code is a solution, well...it’s not a good one for the entire economy. Especially since we’re not far off from A.I. being able to do basic coding on its own. What jobs are the robots not after? The ones hard to automate...like plumbers and freeway overpass builders.
Sure, some of these displaced workers whose jobs are automated get retrained into other types of work, but government retraining programs (at least in the U.S. of A) have embarrassingly low success rates. (Think about the type of people who'd sign up to have the government retrain them. Yeah...they now work at TSA, stealing toenail clippers all day long). Plus, more and more contract and gig jobs are replacing regular full-time jobs with benefits, since it saves employers money. And with an overeducated workforce, we’ve got college grads working as baristas and law school graduates loaded with student debt, unable to find a law-related job.
The mismatch of skills and available jobs, as well as the changing landscape of available jobs due to increased contract work and automation, make underemployment a real threat to the economy.
Remember, underemployment isn’t people who are choosing not to work—it’s people who made bad decisions in their educational paths and would rather have full-time jobs than not, and who would rather use their skills than not. Underemployment is associated with poverty, since people have a hard time finding enough work to support themselves.
Only time will tell what the government decides to do about increasing underemployment as retraining programs continue with their poor success rates.
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Finance: What is Above Full Employment E...20 Views
Finance a la shmoop what is above full employment equilibrium? question wouldn't
full employment mean that everyone who wants a job is employed wouldn't that be
full employment well no it's a government statistics so full isn't [Government worker in office]
really full it's you know full-ish and full is probably impossible anyway
because there will always be college students part-time uber drivers [Students graduating and uber driver appears]
derelicts and you know actors so when economists talk about full employment
they mean that everyone who is actively seeking work is generally finding work
but it recognizes that a lot of people have either given up the hunt and are
happy living on the equivalent of replacement value of you know 48 grand a [Woman at the desk of a cafe]
year of welfare or they're you know off the grid
well the equilibrium notion is the hard part to conceive here when "almost
every single living being" is employed it likely means that the
economy is on fire in the in the good way tons of demand for stuff tons of
shortages of labor and supplies and it also probably means that we have roaring
inflation which is generally bad there is a balance of employed and unemployed [employed and unemployed workers on a scale]
which makes for a stable set of parameters that keep the people employed
who want to be employed and it keeps inflation at small numbers such that old
people who generally retire on bonds aren't forced to live inhuman lives in
their station wagons parked on the side of the road because roaring inflation at
6% has made their 2 percent a year bond investment returns destroy most of the
buying power of their life savings belt historically economists have generally
targeted 95 percent as the full employment equilibrium number or 5
percent as the unemployment rate they're shooting for in other words at that
level there is low or just very modest inflation and the employment seeking [Man discussing employment equilibrium]
masses have generally found what they've been looking for you know like bono
turns out he was just looking for his car keys.... go figure..[Bono singing into microphone]
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