The number of underemployed workers, people who are in employment but want to work more hours, has risen by 1 million since the start of the economic downturn in 2008 to stand at 3.05 million in 2012, a new report from ONS shows today.
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.
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 (39.4%), bar staff (32.9%) and cleaners (30.9%).
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%. Comparing the four year average before the onset of the recent economic downturn (2005 to 2008) with the latter period, the biggest percentage point increase in underemployment was in Yorkshire and the Humber, rising by 3.9 percentage points to 10.6%. In the earlier period the North East had the highest underemployment rate at 7.7% and the East of England the lowest at 6.3%. 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.
In 2012, 24% of part-time workers were underemployed, compared with just 6% of full-time workers. 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.
A podcast giving more background on this analysis in available on the ONS Youtube channel at www.youtube.com/user/onsstats
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