The Current War: The Unemployed Vs. The Underemployed

September 5th, 2011

Hold onto your job at all costs

America’s 14 million unemployed aren’t competing just with each other. They also have to contend with 8.8 million other people not counted as unemployed – part-timers desperately looking for full-time work. When consumer demand picks up, companies will likely boost the hours of their part-timers before they add jobs, economists say. This gives them room to expand without hiring.

More competition

And the unemployed will face another source of competition once the economy improves: About 2.6 million people who aren’t counted as unemployed because they’ve stopped looking for work. As soon as they start looking, they’ll be classified as unemployed and push the percentage rate up. Intensified competition for jobs means unemployment could exceed its historic norm of 5 percent to 6 percent for several more years.

The statistics

There are so many numbers being quoted by those who know and those who don’t that the picture is confusing, except for the fact that America now has too many people out of work. The jobs crisis has led Obama to schedule a major speech Thursday night to propose steps to stimulate hiring.

Example

One American frustrated with part-time work is Ryan McGrath, 26. In October, he returned from managing a hotel project in Uruguay. He’s been unable to find full-time work. So he’s been freelancing as a website designer for small businesses in the Chicago area. Some weeks he’s busy and making money. Other times he struggles. He’s living at home, and sometimes he has to borrow $50 from his father to pay bills. He’s applied for ‘a million jobs.’ "You go to all these interviews for entry-level positions, and you lose out every time," he says. Sure you do. Nationally, 4.5 unemployed people, on average, are competing for each job opening. In a healthy economy, the average is about two per opening.

Another example

Norman Spaulding, 54, quit his job as a truck driver two years ago because he needed work that would let him care for his disabled 13-year-old daughter. After repeated rejections, Spaulding concluded a few weeks ago that the cost of driving to visit potential employers wasn’t worth the expense. He suspended his job hunt. He and his family are getting by on his daughter’s disability check from Social Security. They’re living in a trailer park on Texas’ Gulf Coast. "It costs more to look than we have to spend," he says.

Third example

Emma Draper, 23, lost her public relations job this summer. To pay the rent on her Washington apartment, she’s working part time at the retailer South Moon Under. She’s selling $120 Ralph Lauren swimsuits and other trendy clothes. Her search for full-time work has been discouraging. Employers don’t call back for months, if ever. "You’re basically on their timeline," Draper says. "It’s really hard to find a job unless you know somebody who can give you an inside edge." Retailers, in particular, favor part-timers. They value the flexibility of being able to tap extra workers during peak sales times without being overstaffed during lulls. Some use software to precisely match their staffing levels with customer traffic. It holds down their expenses.

This entry was posted on Monday, September 5th, 2011 at 7:52 am and is filed under Economy, Employment, Finance, Money, Personal / Internet. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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