Being underemployed can have a significant impact on the financial, personal and social lives of individuals. While there are some people who are entirely without work (e.g. the unemployed), there is also a growing number of people who are in work but who want more work (i.e. underemployed). These workers are likely to be competing with the unemployed for available jobs.
Who are underemployed people?
The International Labour Organization (ILO) describes underemployment as the underutilisation of the productive capacity of the labour force. Underemployment may refer to a variety of situations, most commonly it refers to someone who is employed, but not in the desired capacity. The unmet need may relate to any or all of: hours of work, level of skill utilisation, application of qualifications or experience, or level of compensation (i.e. working in a lower paid job than qualifications would suggest the worker is suited to). While there is a growing pool of research on skills mismatch, space constraints mean this theme will not be discussed here.
The focus of this guide is employed people, who wanted to work more hours, and were available to do so within a specified period of time (i.e. time-related, or ‘visible’ underemployment).
The ILO describes employed people as those above a specified age (i.e. 15 years and over) who performed any work at all, in a specified period, for pay or profit (or payment in kind), or who were temporarily absent from work. More information on employment is provided in Employment statistics: a quick guide.
Insufficient hours of work
The Australian Bureau of Statistics (ABS) identifies two distinctive groups as underemployed, people who:
- worked part-time and wanted to work more hours and were available to start work with more hours, either in the reference week or in the four weeks following the reference week; and
- usually worked full-time, but who worked part-time hours in the reference week for economic reasons (such as being stood down or insufficient work being available). It is assumed that these people wanted to work full-time and would have done so, had the work been available.
How is underemployment measured?
The ABS conducts a monthly Labour Force Survey. This household survey is designed to produce key estimates of the labour force (employment and unemployment) from a sample of more than 50,000 people.
Underemployed workers are employed people aged 15 years and over, who want, and are available to work, more hours than they currently have.
Note that the Labour Force Survey excludes some groups of people, including those living in institutions, members of permanent defence forces, certain diplomatic personnel, and overseas residents. More information is available from the ABS.
The ABS releases quarterly trend, seasonally adjusted and original (unadjusted) estimates of underemployed people through the Labour force (cat. no. 6202.0, Tables 22 and 23). The same release also includes monthly estimates (original only) from July 2014 onwards. Estimates are available by a limited range of characteristics, including age, sex, State and Territory. Labour force, detailed, quarterly (cat. no. 6291.0.55.003, Table 19) provides estimates of underemployed people by industry and occupation (main job).
The number of underemployed workers (head count)
Graph 1 shows changes in the number of underemployed people by sex from the start of the data series (trend) until the most recent quarter.
Chosen excerpts by Job Market Monitor. Read the whole story at Underemployment statistics: a quick guide – Parliament of Australia