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Leonid Bershidsky

Underemployment Is the New Unemployment

Western countries are celebrating low joblessness, but much of the new work is precarious and part-time.

It’s not always what it seems.

It’s not always what it seems.

Photographer: Joe Raedle/Getty Images

Some major Western economies are close to full employment, but only in comparison to their official unemployment rate. Relying on that benchmark alone is a mistake: Since the global financial crisis, underemployment has become the new unemployment. 

In a recent paper, David Bell and David Blanchflower singled out underemployment as a reason why wages in the U.S. and Europe are growing slower than they did before the global financial crisis, despite unemployment levels that are close to historic lows. In some economies with lax labor market regulation — the U.K. and the Netherlands, for example — more people are on precarious part-time contracts than out of work. That could allow politicians to use just the headline unemployment number without going into details about the quality of the jobs people manage to hold down.