Lack of jobs, not lack of skills, explains underemployment rate
Andrew Green Josh Bivens
June 15,
2011 - EPI
Some have suggested that part of the reason the unemployment rate remains
stubbornly high is that too many American workers lack the skills and education
currently demanded by employers. This so-called gskills mismatchh theory for
todayfs high unemployment, however, does not fit well with some basic labor
market facts, particularly the growth trends in underemployment across all
education levels.
The underemployment rate is a more comprehensive measure of labor market
slack than the unemployment rate because it includes not just the officially
unemployed but also jobless workers who have given up looking for work and
people who want full-time jobs but have had to settle for part-time work. As the
chart shows, there was a very large increase in underemployment even among
workers with a bachelorfs degree or more education, growing from 3.9% in
December 2007 to 8.4% in March 2011. In fact, the percentage increase in
this underemployment rate was greater for workers with a bachelorfs degree or
more than for all other education categories.
The fact that the economyfs best-educated workers have seen a more than
doubling in their underemployment rate is just one of many pieces of evidence
suggesting that the anemic recovery reflects a general lack of job growth rather
than a deficit of skills or education among its workers.