The Growing Underemployment Problem in America

For years now, the published unemployment rates in a America have been misleading in a variety of ways, and one of the most significant respects in which that is true has to do with the plague of underemployment that has gripped the nation for far too long. Underemployment is sort of a catch-all term that describes different groups of people who would prefer to be working more or better than they are presently, including college graduates working at jobs that don’t require degrees, as well as part-time workers who are not able to find full-time employment. The growing class of the underemployed may serve as some good news to shifty policy wonks who want to point to a decline in unemployment as a sign that the economy is improving, but the truth is that the growth of underemployment is absolute confirmation that the economy remains miserable, and that there seems to be no relief in sight.

As for the reasons why there is such an enormous underemployment problem, presently, they principally revolve around the fact that as the government inserts itself more and more into private business, as well as makes decisions that are against the best interests of American capitalism (punitive corporate tax rates, for example), firms find themselves in possession of fewer resources with which to expand and offer meaningful jobs. Additionally, companies are finding, in this age of ever-evolving technology, that they can do more with less. For business, this has become both a money-saver as well as a convenience, but it also plays a role in the matter of the aforementioned government influence, as well – consider this in terms of the Affordable Care Act, or “Obamacare;” if a business has fewer than 50 full-time employees, it is not bound to offer health insurance, and its workers have to purchase coverage on their own from either state exchanges of private insurers. Similarly, workers who put in more than 30 hours per week at their jobs, or 130 hours per month, must have the ability to obtain employer-sponsored coverage at their jobs, assuming the employer meets the previously-noted threshold of being other than a small business (50 or more employees), per the established government standard. It’s the latter stipulation that many businesses are exploiting, because even if they are large enough to meet the 50-person standard regardless, they might (and many do) seek to limit their costs by keeping their total full-time employee number as low as possible, and one way to do that and continue to see meaningful productivity is to offer higher numbers of part-time jobs.

What’s particularly troubling at this point in time is how the number of people working in part time jobs hasn’t abated in many states since the onset of the “Great Recession,” and, further, how that number has actually continued to grow, in other states; for example, according to Labor Department statistics, involuntary part-time workers are actually on the rise in both Florida and Texas, six full years after the economic collapse. This data tends to feed the talk that there is a “new normal” in the American economy, one characterized chiefly by higher chronic unemployment, and, collaterally, higher underemployment, and that the nation’s socio-economic infrastructure will be adjusting accordingly.

This said, what does “adjusting” mean? Honestly, it means a stronger shift toward a collectivist government and economy. As government policies toward businesses and more prosperous individuals end up forcing more citizens into marginalization, wealth redistributionist efforts will become more pronounced as greater numbers of people come to need food stamps and other forms of assistance just to get by even minimally. Things may somewhat function this way for a while, during the early stages of the shift, as there remains enough well-to-do to tax into oblivion, but, as the late Margaret Thatcher once reportedly said, “The problem with socialism is that you eventually run out of other people’s money.” Once that happens, and it will, make no mistake about it – those lucky enough to have even part-time jobs may well be the nation’s new elite at that time.

The information contained here is for general information purposes only. The Financial Writer blog and Bob Yetman disclaim responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this article, or any other article featured at this blog, should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

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