Even As Unemployment Drops, Those Who Find Jobs Can’t Get Enough Hours

On Friday, the monthly jobs report showed that 162,000 jobs were added in July, pushing the unemployment rate down to 7.4 percent. This is the lowest rate in the past five years, but a closer look reveals that those who are lucky enough to find a job may still be struggling to get by.

Another number was also updated: the number of people involuntarily underemployed. This increased by 19,000 from June to July and now totals 8,245,000 people. This means that nearly 6 percent of the American labor force wants to work full time (35 hours a week or more) but simply cannot find a job that will give them that many hours.

While unemployment, then, may have reached a five-year low, underemployment is on the rise. A report released in July from the University of New Hampshire’s Carsey Institute found that “the single largest five-year increase in involuntary part-time employment since the 1970s occurred between 2007 and 2012.” This increase has continued through 2013 and affects workers of a great variety of skill sets. Working part-time generally involves lower pay, fewer benefits, and less job security — all factors that increase the likelihood that a part-time worker will live in poverty.

In fact, one in four involuntary part-time workers lived in poverty in 2012, according to the report. Of full-time workers, just one in 20 lived in poverty. A large chunk of the underemployed are recent college graduates, according to a Reuters poll that revealed that more than 40 percent of recent grads are “underemployed or need more training to get on a career track.” A third of recent graduates earn $25,000 or less, according to that poll.


The Carsey Institute report cites economist Chris Tilly, who argues, “Federal law should ensure that part-time workers receive a benefit package equivalent to that of full-timers, benefits that would be prorated to reflect the differences in hours worked.” Policies that ensure safer and more secure working conditions for part-time workers may decrease the number of part-time positions employers chose to offer, since employers would then save less than they currently do when they keep shifts below 35 hours a week. But for now, involuntary underemployment remains a symptom of an American workforce that is not living up to its potential.