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The Hidden Unemployed


By Kim Shepherd, CEO, Decision Toolbox

As a national recruitment firm filling positions across all industries, titles and geographic lines for the last 18 years, Decision Toolbox has a unique view of the U.S. employment landscape.  From the 80,000 foot level, we can clearly see that the reported 9.8% national unemployment figure – concerning enough as it stands – is drastically deficient.

To begin with, many unemployed workers have gone through their unemployment benefits and thus are no longer counted in unemployment figures, though they are still not working.  Additionally, a steadily growing number of workers are underemployed.  Though the underemployed are working, they are taking part time jobs, or are in jobs that don’t fully employ their skills.  Underemployment, along with unemployment, is widely seen as a force slowing the economic recovery.  Despite its devastating effect on U.S. workers and the economy as a whole, underemployment is missed by most official definitions and measurements of unemployment.  Thus, the “official” unemployment rate is only telling part of the story.

The Underemployment Epidemic

To get a realistic reading on the health of U.S. employment, unemployment should be redefined to include underemployment.  The old definition of unemployment was “out of work”; the new definition of unemployment ought to be “out of YOUR work”.  According to, underemployment is defined as:

  1. Employed only part-time when one needs and desires full-time employment.
  2. Inadequately employed, especially employed at a low-paying job that requires less skill or training than one possesses.
  3. Not fully or adequately used or employed (when one would like to be).

Laid off from their traditional lines of work, the underemployed are forced to take positions paying well below their accustomed compensation and lifestyles.  Truth be told, many people are working two jobs in an attempt to make ends meet and are STILL underemployed.

When taking the underemployed into consideration, the percentage of the U.S. workforce that is not working or is being involuntarily under-utilized is more along the lines of 30% – that’s a startling one out of three.

Effects of Chronic Unemployment/Underemployment

To further illustrate the epidemic proportions of underemployment, one can look to the industries that have been hardest hit by the recession.  These days, when Decision Toolbox is recruiting for an Accountant, our advertisements are pulling in ex Controllers and even ex CFOs who, just to get a paycheck, are willing to take enormous steps back in their careers and in their earnings.  Other occupations obliterated by the down economy include Mortgage Brokers and Real Estate Agents – these folks are almost extinct!  As independent contractors, are they collecting unemployment? No.  Are they being counted in the unemployment figures? No. Are they able to pay their mortgages? No.

When you speak with unemployed or underemployed workers, you’ll find many they have gone to Disneyland in their minds. They pluck up positivity and talk about how, with all of their free time, they’ve finally gotten around to doing those things they’ve been wanting to do for so long – “I’ve planted a sustainable garden!”, or “I’ve refurbished my father in-law’s Edsel!”.  In other words, they are living on the river we know as “DeNial”. Their 401Ks are cashed out, they have no more equity in their homes, they can’t even think about the “R” word – retirement is just too painful and scary a place to go at this point.  They don’t know what else to do.

Home, Sweet Home?

One might suggest relocation as an option to get out from under. Start fresh in a new geography with more jobs to offer!  Forget about it. If these underutilized workers are home owners, they have probably stopped making their mortgage payments. The banks are looking the other way – they don’t want to get stuck with another house that no one can buy.  So, they’re leaving these residents in their homes without receiving payment, hoping they will soon get jobs and start making the house payments again.  They’re literally squatters in their own homes.  If they do land a job in a new location, they can’t afford to relocate.  Even if the hiring company pays for relocation costs, the new hire would then be stuck with a house in their previous location and it’s mounting past-due mortgage payments as well as rent in their new location.  It’s a bleak picture to be sure; unfortunately, it’s life in this economy for many. In fact, test this theory in conversation at your next dinner party.

Reality Check

The best thing you can do right now is to not pull an ostrich. Get your head out of the sand and see where we really are with regards to employment and the economy – and be either angry or grateful.


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2 Responses to “The Hidden Unemployed”

  1. March 09, 2011 at 8:32 am, Kathy Carpenter said:

    Kim, Thank you for taking the time to share your insight on the subject of unemployment and underemployment. I truly value your opinion knowing that you have been on the inside of hundreds of recruiting organizations, as have I. We have the unique privilege of seeing the difficult truths for today’s working generations and what we are all struggling with, uniquely depending on out age.
    I am hoping the organism of chaos will prevail.

    Keep the words of wisdom coming. Kathy


  2. April 21, 2011 at 1:51 pm, Jim Stroud said:

    This is an excellent take on the reality of the market. I will be tweeting this one.


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