| Underemployment |
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1. Underutilization of skills In one usage, it describes the Employment of workers with high Skill levels in low- Wage jobs that do not require such abilities. For example, someone with a college Degree may be Tending Bar or driving a cab. Alternatively, a skilled machinist may be working at a fast-food outlet. This may result from the existence of Unemployment , which makes workers with bills to pay (and responsibilities) take almost any jobs available, even if they do not use their talents. This can also occur with individuals who are being Discriminated against, lack appropriate Trade Certification or Academic Degree s (such as a High School or College Diploma ), or have served time in Jail . Some types of skills -- such as those associated with doctorates in literature or philosophy -- are valued very poorly by the Market place, so that people often end up taking jobs that do not employ their education. A related kind of underemployment refers to "involuntary part-time" workers, who could (and would like to) be working for the standard work-week and can only work a fraction of this. Underemploment is more prevalent during times of economic stagnation, most obviously seen in the case of the Great Depression of the 1930s. These kinds of underemployment arise because Labor Market s typically do not " Clear " using Wage Adjustment . Instead, there is non-wage Rationing of jobs. 2. Underuse of economic capacity The term can also be applied by Regional Planner s to describe Localities where Economic Activity rates are unusually low. This can be induced by a lack of job opportunities, Training opportunities, or services such as Childcare and Public Transportation . Such difficulties may lead Resident s to accept economic inactivity rather than register as Unemployed or actively seek jobs because their prospects for regular employment appear so bleak. (These people are often called Discouraged Worker s and are not counted officially as being "unemployed.") The tendency to get by without work (to exit the labour force, living off of relatives, friends, personal savings, or non-recorded economic activities) can be aggravated if it is made difficult to obtain unemployment benefits. Relatedly, in Macroeconomics , "underemployment" simply refers to '' Excess Unemployment '', i.e., high unemployment relative to Full Employment or the NAIRU . Thus, in Keynesian Economics , reference is made to Underemployment Equilibrium . Economists calculate the cyclically-adjusted Full Employment unemployment rate, e.g. 4% or 6% Unemployment , which in a given context is regarded as "normal" and acceptable. Sometimes, this rate is equated with the NAIRU , also known as the Natural Rate Of Unemployment . The difference between the observed unemployment rate and cyclically adjusted full employment unemployment rate is one measure of the societal level of underemployment. By Okun's Law , it is correlated with the gap between Potential Output and the actual real GDP . This "GDP gap" and the degree of underemployment of labor would be larger if they incorporated the roles of underemployed labor, involuntary part-time labor, and discouraged workers. 3. Underuse of employed workers The third definition of "underemployment" describes a polar opposite phenomenon: to some 17:09, 23 Mar 2005 (UTC) --> This kind of underemployed workers may exist for '' Structural '' or '' Cyclical '' reasons:
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