Laid-Off Workers Settle for Part-time Jobs

How underemployment is defined often depends on which group is tracking it. Generally, it implies work that's inappropriate to a worker's education and qualifications. Gallup classifies the underemployed as those who are jobless or working part time but want full-time work. To the BLS, the definition also includes unemployed people who were so discouraged that they stopped looking for jobs.

Frances McKee-Ryan, assistant professor of business and management at the University of Nevada at Reno, says underemployment is prevalent but consistently overlooked by researchers as a subject worth examining. In a recent study, she predicted that underemployment "will increase in both its scope and severity" as jobless adults reenter the workforce.

Next: Here's what you need to do if you're underemployed. >>

She also concluded that being overqualified, underpaid or working part time will likely have long-term consequences on a worker's marketability, self-confidence and future earnings.

"When you take a job out of your area of expertise or at a lower level, it can damage your career and affect your lifetime earnings potential. If you're at the latter end of your career cycle, you may never make that up."

There are more underemployed workers now than in any other economic downturn in the last 30 years. The BLS recently analyzed the rise in underemployment after the last four recessions — 1981-1982, 1990-1991, 2001 and 2007-2009. In the two years following the latest recession, the number of underemployed rose by 107 percent, from 4.2 million to 8.7 million. By contrast, after each of the previous recessions, the number rose by 33 percent to 41 percent.

"It's a nightmare," says Heidi Shierholz, an economist at the Economic Policy Institute in Washington, D.C. She doesn't expect the situation to change anytime soon.

"We're facing at least another three years of extremely elevated unemployment, though we'll be making steady progress through that period," she says. "We'd be very lucky to get to prerecession unemployment levels by 2016."

Today's economy has been notably hard on older workers. As of April, unemployed workers under 55 had on average been jobless for 39 weeks. For those 55 and older, the duration exceeded one year.

Mark Hamilton is among those who have had no luck finding employment. He lost his full-time job in business development near Southfield, Mich., in December 2007, along with his health insurance.

Now Hamilton, 51, works as a commissions-only salesman for a "hodgepodge" of companies, from security systems and water meters to audio systems. In February, he didn't make enough to pay his mortgage.

"I absolutely did not think I'd be out of work this long," says Hamilton, a father of two. "I don't understand why I can't find a job. I'm prepared to take less money than what I was making before."

Age discrimination among hiring personnel is surely a factor, says Rix. The longer older adults are out of work, she adds, the harder it is for them to push back into the labor pool.

Many opt to take early Social Security benefits to have some income. Others, like Bookfor, empty their 401(k) accounts to get by.

In addition to his three jobs, Bookfor is taking computer and data entry classes. "I could have a nervous breakdown, but I don't let it get to me," says Bookfor, who is single. "I smile and keep a stiff upper lip. I'm holding on every day to the hope that I'll get a call and someone says, 'Come on in for an interview.' "

Carole Fleck is a senior editor at the AARP Bulletin.