Underemployment
Policy-makers may under-research these meanings when assessing the economy as they focus on unemployment instead:[3] Underemployment is a significant cause of poverty as pay may be insufficient to meet basic needs.
[3] Underemployment is a problem particularly in developing countries, where the unemployment rate is often quite low, as most workers are doing subsistence work or occasional part-time jobs.
[10][needs update] In one usage, underemployment describes the employment of workers with high skill levels and postsecondary education who are working in relatively low-skilled, low-wage jobs.
That may result from the existence of unemployment, which makes workers with bills to pay (and responsibilities) take almost any jobs available, even if they do not use their full talents.
That can also occur with individuals who are being discriminated against, lack appropriate trade certification or academic degrees (such as a high school or college diploma), have disabilities or mental illnesses, or have served time in prison.
While it is costly in terms of money and time to acquire academic credentials, many types of degrees, particularly those in the liberal arts, produce significantly more graduates than can be properly employed.
Similarly, technically specialized workers may find themselves unable to acquire positions commensurate with their skills for extended lengths of time following layoffs.
Such difficulties may lead residents to accept economic inactivity rather than register as unemployed or actively seek jobs because their prospects for regular employment appear so bleak.
The tendency to get by without work (to exit the labor force, living off relatives, friends, personal savings, or non-recorded economic activities) can be aggravated if it is made difficult to obtain unemployment benefits.
This may be because of legal or social restrictions on firing and lay-offs (e.g. union rules requiring managers to make a case to fire a worker or spend time and money fighting the union) or because they are overhead workers, or because the work is highly seasonal (which is the case in accounting firms focusing on tax preparation, as well as agriculture and the hospitality industry).
As such, if they may employ more workers than necessary, they might not be getting the market signals that would pressure them to reduce their labour force, and they may end up carrying the resultant excess costs and depressed profits.
Other countries (e.g. Japan) often have significant cultural influences (the relatively great importance attached to worker solidarity as opposed to shareholder rights) that result in a reluctance to shed labour in times of difficulty.
Cyclical underemployment refers to the tendency for the capacity utilization of firms (and therefore of their demand for labor) to be lower at times of recession or economic depression.
[citation needed] At such times, underemployment of workers may be tolerated and indeed may be wise business policy, given the financial cost and the reduction of morale from shedding and then rehiring staff.
