Chart of the day, underemployment edition

By Felix Salmon
October 12, 2009
Atlanta Fed charts how the number of people who work part-time but would like to work full time has doubled since the beginning of the recession. That's not normal, even by the standards of previous harsh recessions:

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The Atlanta Fed charts how the number of people who work part-time but would like to work full time has doubled since the beginning of the recession. That’s not normal, even by the standards of previous harsh recessions:

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Anybody care to hazard a guess why this time is so different? The underemployment rate is a whopping 17%, so it’s not just that the rate has doubled from a low base.

(Via Rampell)

7 comments

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Didn’t I share my flawed “neck ring” theory already? Finance was our neck ring. We removed it and the atrophied muscle (dead real economy) let our head fall over. This would be a nice description, except that in real life the neck muscles supposedly don’t atrophy much.

Outsourcing work benefits multi-national corporations, not employment in countries as wealthy as the US. Small business/large business owners are required to provide certain benefits to full-time employees but not part-time employees. 70% of our economy is now driven by consumer spending upon goods and services produced elsewhere and imported into the US. 90% of our wealth is concentrated in the hands of less than 10% of our population and they are not spending. The uncontrolled flow of illegal immigrants provides a free flow of cheap labor and places a downward pressure upon wages and employment opportunities. It’s not difficult to figure out why unemployment and underemployment are at historical highs given the combination of the above.

Posted by KM | Report as abusive

I think it’s pretty standard practice, when times are hard, to

1. Stop hiring new people
2. Fire non-essential people
3. Pay the rest less

in that order. Option #3 is less desirable than #2 because it ruins goodwill among people you’re still employing.

From there, it makes perfect sense that this is simply the first recession in recent memory that is bad enough to force a significant portion of companies to adopt Option #3.

Posted by Bergamot | Report as abusive

Because employers are trying to hoard labour until the recession passes, rather than sacking them now with the expectation of having to recruit them back in a couple of years. Let’s hope they know something we don’t about that whole recession-passing thing…

Posted by Zardoz | Report as abusive

I’d speculate that the robber barons have opted for part time workers so they can keep their workforce hungry and less likely to make trouble. AND, the absence of any benefits whatsoever offered to part timers makes this strategy very attractive to the ruling class.

Posted by Not Unemployed anymore | Report as abusive

Yeah. Decades of M&A, and outsourcing.

Conditions that stifle innovation leaving big black holes where a real economy should be.

I live in the ghetto-est ghetto. But I still can find a dozen stores within walking distance that will sell me Nikes and other sneakers made by eight-year-old Chinese girls. And Variety Stores loaded to the gills with Made in China goods for 99 cents or so.

Maybe that\’s why unemployment is 17%… we all want stuff for 99 cents and no American factory can compete in that sort of consumer crap-fest.

Posted by Bryan X | Report as abusive

how about too much in the way of average marginal tax rates, unemployment benefits and/or safety nets? i mean, there’s never been less incentive to work.