Underemployment in the U.S. is worse than the most commonly cited figures suggest, a new analysis published by the Federal Reserve Board of Governors concludes.
Researchers at the central bank published a note Monday saying that the Bureau of Labor Statistics figures on the number of workers forced into part-time work “substantially underestimates underemployment along the dimension of hours people are actually working.”
In other words, there are more people who would like more work than is captured in the monthly jobs report.
The jobs report includes figures, taken from the Census household survey, on the number of workers who work less than 35 hours a week because they cannot find full-time work or because they had their hours cut, grouped together into the category of “part-time for economic reasons.” There were 6 million such workers who wanted more work in April, according to the Bureau of Labor Statistics, down by roughly one-third since the worst of the recession but still elevated.
That category, however, doesn’t include people who do work 35 hours, meeting the definition of “full-time,” but would want to work even more if they could. When those workers are included, underemployment may be five times higher.
Using a different data source, namely surveys from the Institute for Social Research at the University of Michigan, the Fed researchers found that the total number of people who would work more if they could is significantly higher. They conclude that the official “part-time for economic reasons” category may represent only one-fifth of total underemployment.
Federal Reserve officials, including Chairwoman Janet Yellen, have said that the U.S. economy is nearing full employment, but that some “slack” remains despite the low headline unemployment rate of 5 percent. That slack includes people forced into part-time work, long-term unemployment and workers who have quit the job hunt out of frustration, thereby falling out of the calculation of the unemployment rate.
