Monday, December 7, 2015

A closer look at underemployment

 - by New Deal democrat

One of the big success stories in the labor market this year has been the progressive decrease in the discouraged and the underemployed.  The below graphs both add together those "not in the labor force but who want a job now" and "part time for economic reasons."

Here is the big picture since the beginning of the modern series in 1994.  Note that the low occurred at the height of the tech boom in 1999 at 7.483 million. I have subtracted that so that you can see how much of an increase there has been since then:

At its post-recession worst, an additional 8 million people had been thrown into this category.  That is equivalent to over 5% of the workforce!

The big decline has taken place beginning with the 3rd Quarter of 2014, which I've zoomed in to show below:

Even so, at present we are 2 million or more above the tepid levels of 1996 and 2004-05. At our 2015 rate, it will take another 5 quarters for us just to get to that level.  And with the Fed raising rates, I am not confident at all that we will sustain our recent pace.