The number of underemployed workers – people who are in employment but want to work more hours – has risen by 980,000 since the start of the economic downturn in 2008 to stand at 3.05 million in 2012.
The number of underemployed workers was fairly stable over the period before the onset of the economic downturn in 2008. Since then, it has increased by 47%. Nearly two-thirds of the increase took place in the 12 months between 2008 and 2009, when the economy was in recession. The number of underemployed workers has continued to rise since 2009, although at a much slower rate than during the recession.
Just over three-quarters, or 76%, of those underemployed in 2012 stated a desire to increase their hours in their current job. This will include a range of people, from those who actively asked their employer for more hours to those who would merely prefer longer hours if given the opportunity. A further 15% wished to increase hours by finding a replacement post, leaving only 9% who wanted an additional role.
The occupation category that consistently has the highest rate of underemployment is ‘elementary occupations’ (such as labourers, cleaners and catering staff). Within this category, those with some of the highest underemployment rates in 2012 are school crossing/midday assistants (39%), bar staff (33%) and cleaners (31%).
In 2012, 24% of part-time workers were underemployed, compared with just 6% of full-time workers. This is not surprising though, as part-time workers have fewer hours of work to begin with. Another key factor influencing underemployment is the level of earnings. In 2012 the average underemployed employee earned a gross hourly wage of £7.49 while the average non-underemployed employee earned £10.81. The link between low pay and underemployment may partly explain why underemployment rates are higher for younger workers – in 2012 22% of workers aged 16–24 were underemployed, compared with 10% of those aged 35–49.
Underemployment rates vary across the English regions and devolved countries of the UK. Taking a four-year average from 2009 to 2012, the highest underemployment rate was in the East Midlands where 10.7% of workers wanted more hours in work. This was followed by Yorkshire and the Humber (10.6%), the North East (10.5%) and the South West (10.4%). The lowest underemployment rate was in the South East at 9.2%. Some of the shared characteristics among those regions and countries that have high average underemployment rates are above-average proportions of part-time workers, workers aged between 16 and 24 and workers in low-skilled elementary occupations. All these characteristics increase a worker’s chance of being underemployed.
There are many possible factors behind why a worker is underemployed, for example:
An employer may only be able to offer limited hours.
A worker may be in a job that only lends itself to certain hours of the day, e.g. bar staff can only work when the bar is open.
Self-employed workers may have low hours of work as a result of low demand for their skills or services.
Economic or personal conditions may change, increasing the desire for hours in work.
Poor economic conditions may result in more people looking for jobs but fewer jobs being created. This may cause people to settle for “second-choice jobs” as an alternative to unemployment and as a route into getting more hours in the future. For example a worker may settle for a part-time role even though they actually want a full-time one.
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