Underemployed

Thu, 26/01/2012 - 17:30 -- nick

 
 
From The Telegraph 18th January 2012:

'the number of Britons who are "underemployed" - working part-time because the cannot find full-time work - has jumped by 44,000 on the quarter to reach 1.31m - the highest figure since records began in 1992.
The number of people temping because the could not find a full-time job also rose by 10,000 on the quarter to 590,000, accounting for more than a third of the total number of temporary workers, the figures showed'
 
A great deal of attention has been focused on the rise in unemployment during the current recession. But underemployment has also been rising quickly over this period and shares many of the same problems – particularly low income and difficulty in finding appropriate work – experienced by unemployed people, as well as a lack of promotion opportunities.
 
There is another type of underemployment not discussed above; those who are working in jobs that are below the level at which they normally work, or below the level they could reasonably expect from their qualifications. Figures are hard to come by for this group but anecdotal evidence suggests that it is a highly significant number. If all groups of the underemployed are added together – the unhappy temps, the unwilling part-timers and the demoted highly-qualified – we can see that this is a significant problem, likely to be bigger in number terms even than unemployment.
 
This is a problem for a number of reasons. Those who are underemployed and working part-time may struggle to pay their bills; they may be able to fill the gap for a while by living off savings and taking on more debt but this is unlikely to be a long-term solution.
 
This issue also has significant effects on the public purse. Given the typically lower-paid nature of temporary and part-time work many of the underemployed are likely to be receiving tax credits, income support, and council tax benefit. This represents a shift of the responsibility for paying staff from companies to tax payers, as it is the public purse that subsidises the company’s decision not to provide full time work or a living wage.
 
The government’s work policy seems to centre on a hope that the market will provide jobs, together with some more targeted support for those aged under-25. So far the market has been stubbornly resistant to creating the number of jobs required, as might be expected with the world’s economy in its current state, and there has been criticism of the Government’s provision for younger people, centred on the Youth Contract, which delivers work placements, wage subsidies and apprenticeships.
 
An issue with this response to young people’s unemployment is that it may make the underemployment problem worse. Its focus is on engaging young people in employment, education or training with little thought given to quality or suitability. Wage subsidies bring major issues; how can we be sure that an employer isn’t claiming a subsidy when they would have offered a job without it?
 
The apprenticeship programme has attracted criticism for the reduced length and quality of the training offered, with the IPPR stating that ‘It's supermarkets… reclassifying their internal training as an apprenticeship and in the short term taking some money from the government’ and training existing staff rather than taking on new staff as intended. An apprenticeship used to mean many years of on-the-job training, one day a week of college including wider education as well as vocational training, and a meaningful qualification at the end. The quality provided by this system was recognised in decent wages for those who successfully completed their training.
 
The change in apprenticeships from establishing well-rounded craftsmen and women to barely-qualified, low-waged employees is likely to lead to more underemployment; the lack of skills among a workforce or potential workforce directly impacts on its ability to demand jobs and good wages.
 
There are no overall quality measures for work placements, with some young people forced to work unpaid in shops with little obvious career potential. One recent example was that of Cait Reilly, who was sent on mandatory work experience in Poundland (http://www.guardian.co.uk/commentisfree/2012/jan/15/unemployed-young-people-need-jobs). This geology graduate had been volunteering in a museum to try to gain work in that sector so had no obvious need for additional customer service experience, but was banished to Poundland anyway.
 
This is important because entry in to work of any type should not be seen as the only important measure of value in the government’s drive for work. Sustainability is likely to be reduced along with quality and suitability if square pegs are hammered in to round holes. It may be that the government is willing to sacrifice long term career prospects for entry to any job, but if those workers are unproductive due to their unsuitability it may not benefit the country.
 
 

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