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DEFINITIONS

Underemployment

Definition

In economics, the term underemployment has three different distinct meanings and applications. All meanings involve a situation in which a person is working, unlike unemployment, where a person who is searching for work cannot find a job. All meanings involve under-utilization of labor which is missed by most official (governmental agency) definitions and measurements of unemployment.

Underemployment can mean:

  1. The employment of workers with high skill levels in low-wage jobs that do not require such abilities, for example a trained medical doctor who works as a taxi driver.
  2. "Involuntary part-time" workers—workers who could (and would like to) be working for a full work-week but can only find part-time work. By extension, the term is also used in regional planning to describe regions where economic activity rates are unusually low, due to a lack of job opportunities, training opportunities, or due to a lack of services such as childcare and public transportation.
  3. "Overstaffing" or "hidden unemployment", the practice in which businesses or entire economies employ workers who are not fully occupied---for example, workers currently not being used to produce goods or services due to legal or social restrictions or because the work is highly seasonal.
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Additional - what is the meaning of Underemployment?

This measure of employment and labor utilization considers how well a labor force is using its skills, experience, and availability to work.  Underemployment includes workers that are highly skilled but employed in low paying jobs and workers employed part time but would rather work full time.  An example of underemployment would be a person with a science degree working as a server in a restaurant since the worker is not employed to their fullest capabilities




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