The rise of underemployment

Who are the underemployed people?

Underemployment occurs when people in a labour force are employed less hours than they’d like, leading them to take on other casual jobs to make more money. According to the Bureau’s Labour Force Survey, reports shows that in 2019, the seasonally adjusted underemployment rate has increased to 8.5 per cent - that’s almost two million people in Australia who want to work more hours than they already do.

This is a problem in Australia, where there’s a growing pool of underemployed workers who are looking for opportunities to gain more income. An underemployed worker may find themselves competing with other underemployed and even unemployed individuals for similar opportunities. So, what is it that creates underemployment among Australians?

Lack of skills and experience

Most of the time, fresh graduates find themselves underemployed in their first job because they might be taking on part-time work and internships. There is a so-called “skills mismatch” between an individual’s skills and the demands in the job market and a lot of the time, entry level jobs require more experience that a fresh graduate currently has. Underemployed workers are at risk of getting a good prospective job in the future as they fail to get enough hours of employment each week. But with the mounting bills, expenses, and responsibilities, they’ll take any job they can get, even if it is not in line with their respective skill set or career interest. 

Low wages

Underemployed workers generally have less disposable income, therefore, these individuals will have the tendency to spend less which may impact on their ability to maintain a healthy work-life balance. This can lead to a lack of motivation at work and cause negative performance, which in turn can make it tough to secure a relevant, full-time position in the future. 

Concentrated part-time work

The structure of the Australian labour market has changed with the increasing demands of part-time work, but it seems like there still isn’t enough work in some industries. Some industries hire more casual employees than others. According to the APH (Australian Parliament House) research has shown that the number of underemployed workers are highest in selected industries such as retail, Arts and Accommodation and Food Services. These industries attract more part-time workers as these businesses are required to be open outside regular working hours. However these circumstance may appeal more to groups such as students who seek fewer hours of work per week.