underemployment

The International Labor Organization (ILO) uses the term underemployment to describe the partial lack of work in its labor market statistics .

Theoretical justification

While the terms unemployment and inactivity are used for the complete absence of gainful employment, the term underemployment stands for the partial absence of gainful employment. The cause of the social problem is identical in both cases: The social volume of gainful employment ( volume of work ) is unevenly distributed among the people who are pushing into the labor market ( potential labor force ) via the applicable regulations on working hours .

The solution to the social problem of unemployment / underemployment lies in the harmonization of the variable factors of work volume, labor force potential and working hours.

Depending on interests, the proposed solutions for harmonizing the three variables are varied. Basically, however, there are 2 variants:

Expansion of the volume of work to expand the demand for labor:

Experience shows that high growth rates in the economy are associated with increased employment. Numerous theories on unemployment try to justify economic growth and thereby compare the behavior of potential labor force with the demands of the labor market. According to this, countries with the world's lowest wages and benefits would have to achieve the highest levels of employment - but this is not the case. In addition, high economic growth does not inevitably establish an increase in the volume of work nor the necessary equal distribution of work and thus the elimination of unemployment / underemployment.

Reduction of the collectively agreed full time for the relative equal distribution of work:

Considered over the last 150 years, a steadily growing population in the highly developed economies is offset by a steadily decreasing volume of work per employed person, which has led to a halving of the collectively agreed weekly working hours.

With the data of the OECD it becomes more concrete for the period from 1970 to 2000:

The labor force has grown in all OECD countries since 1970.
The volume of work has alternately grown and shrunk in almost all OECD countries since 1970 - only in the USA has it grown consistently and only in Germany has it shrunk consistently.
The average full-time collective agreement in the OECD countries has almost reached the starting level of 1970.

Cyclical fluctuations in economic performance entail short-term exclusion from the labor market, which can be cushioned socially. In addition, the cyclical gap in the labor market can be at least partially closed by temporarily expanding the public employment sector.

The currently widespread underemployment and mass unemployment in the form of 50 percent long-term unemployment, on the other hand, as permanent exclusion from the labor market, can clearly be traced back to a failure to adjust the full-time collective agreement, which has not taken place to the required extent over a longer period of time.

Statistical definition

According to the International Labor Organization's concept of underemployment, employed persons are only classified as visibly underemployed if they simultaneously meet the following three criteria:

Less than normal working hours were worked.
The shorter working hours were involuntary.
Additional work was looked for during the reference period or there was availability.

The ILO's labor force concept, on the other hand, defines employment only in an extensive sense, so that it is sufficient to have worked an hour in a week to be classified as gainfully employed. Unemployment is accordingly understood as an extreme situation of total lack of work. These extreme definitions of the labor force concept of the ILO form the basis for the monthly publication of the official figures on employment and unemployment. However, less extreme situations than total unemployment with partial absence of work can also occur within gainful employment. In order to identify such situations and thus complete the statistics of unemployment, the concept of underemployment was introduced.

Statistically, there is underemployment when there are fewer vacancies ( ) than unemployed ( ): ${\ displaystyle A_ {A}}$ ${\ displaystyle A_ {N}}$

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The terms full employment , overemployment and underemployment are used analogously in business administration , see Employment (cost accounting) .

Historical classification

Under the influence of the global economic crisis from October 1929 onwards with its mass unemployment , John Maynard Keynes came to the conclusion in his book General Theory of Employment, Interest and Money , published in February 1936 , that the labor market has become "underemployment equilibrium" ( English under- employment equilibrium ) and full employment can only be controlled by economic policy . The classical economics , however, came earlier to the conclusion that the growth momentum through the market mechanism would lead to full employment.

The trend towards increasing underemployment, which has been going on for some time, speaks for an erosion of the normal employment relationship , which is being replaced by very different forms of gainful employment. Many of them are marginal jobs characterized by short working hours or low wages .

Underemployment as a socially relevant variable and economic indicator was first recorded statistically in the 1990s. The causes of underemployment can be derived from mass unemployment, but are not adequately explained. Only the growth of the service sector and changes in social legislation in favor of marginal forms of employment made both the creation and use of corresponding jobs attractive.

The situation in the Federal Republic of Germany

involuntary part-time workers

Population after predominantly livelihood

Population according to participation in working life

In March 2006, the Federal Statistical Office published monthly data on underemployment in Germany from the ILO labor market statistics for the first time . In the period from January 2005 to January 2006, the share of underemployed persons in all employed persons rose by three percentage points from 10.9% to 13.9%. A good every seventh employed person would have liked to have worked more in January 2006 with the appropriate remuneration. By April 2007, the underemployment rate had fallen to 11.8 percent.

A second source for the description of underemployment results from the data of the Institute for Employment Research - for example for 2006: “Depending on how broad the term underemployment is, the job gap in Germany in 2006 was between 4.49 and 6.59 million. While only the registered unemployed are taken into account in the lower value, there is underemployment of 6.59 million from the registered unemployed, the hidden reserve in the narrower sense, the hidden reserve in measures, the so-called “second labor market”, short-time work and the measures that promote self-employment. (Labor market 2006) "

In this context, involuntary part-time employment from the microcensus was not taken into account. One speaks of involuntary part-time employment when the respondents state that they have not found a full-time job as the reason for their part-time employment. For them, part-time work is usually the lesser evil in order not to slip into unemployment.

In the 2006 microcensus, 1.997 million involuntarily part-time employees were reported, so that in 2006 a total of 8.59 million people were affected by underemployment.

A third source for describing underemployment emerges from the data of the 2007 microcensus on the “population after predominantly livelihood” as opposed to the “population after participation in working life”.

In 2007, 34.34 million people were mainly able to earn their living from gainful employment - that is almost 4 million less gainfully employed persons in the same survey than were recorded under the aspect of participation in working life. In the official data published in 2007, 39.7 million persons in employment were identified according to the Labor Force Concept of the ILO - that is, over 5 million persons in employment more than under the aspect of predominantly livelihood. The Institute for Labor Market and Occupational Research determined a potential labor force of 44.4 million people for 2007, who were pushing for the German labor market. Of these, 34.34 million people were able to secure their livelihood mainly through gainful employment. The difference is almost 10 million potentially or partially employed people who are pushing their way onto the labor market and are nevertheless dependent on the support of the state or family members.

Web links

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Federal Statistical Office - Microcensus
Federal Agency for Civic Education
Eurostat

Individual evidence

^ John Maynard Keynes, General Theory of Employment, Interest, and Money , 1936, p. 316

[1] John Maynard Keynes, General Theory of Employment, Interest, and Money , 1936, p. 316