Underemployed: For some US workers, now any job will do

As US unemployment has climbed, so, too, has the number of workers who are 'underemployed,' or working in positions that do not fully utilize their education or skill sets.

Coleen Klinger has experience working overseas and a degree in international studies. She is watering plants at a local Lowe’s to make a living.

Steve Masten, single father of three, owned a magazine consulting firm for 25 years before taking a job at a gas station in Missouri.

Bill Smith of New York, who has a daughter in college, a son in high school, and a master’s in education and guidance counseling, has had to work packing frozen turkeys.

These are just some examples of the many experienced workers who, after spending months or even years unemployed or underemployed, have decided that any job is better than no job at all.

“Some days I feel embarrassed to think that this is the best that I can do,” says Ms. Klinger of Zanesville, Ohio. “Then I talk with people like my brother who have not worked in over a year. I remind myself that I am doing something.”

More people are underemployed in America than at any time since the government starting keeping the statistic in 1990. By the definition of the US Bureau of Labor Statistics (BLS), they are America’s “underutilized” – those working part time but who want to work full time, those who want to work but have been discouraged by their lack of success at finding a job, and those who are so discouraged that they have stopped looking for work at all even though they want to work.

They are three degrees of frustration – a prism for the desperation of the labor force – and 9.3 million Americans currently qualify. The current record levels of underemployment are a product of the growing long-term unemployment rate. While the number of short-term unemployed is declining, the number of those out of work for six months or longer increased to 5.9 million in November – up from 4.4 million in June, says BLS.

An ‘irretrievable loss’

It is a fundamental challenge to the US economy. Studies show that spells of long-term unemployment can lead to permanent reduced earnings. Once long-term unemployment erodes skills and marketability, workers are more likely to drop out of the workforce, weakening the entire labor market.

In an October appearance on ABC’s “This Week,” former Federal Reserve Chairman Alan Greenspan said long-term unemployment was his greatest jobs-related concern because it represented a potential “irretrievable loss.”

The natural consequence of long-term unemployment is underemployment. To keep their résumés active – not to mention put food on the table – 63 percent of workers who were laid off during the past year said they have applied for positions that were below the job level they had held previously, according to a survey by Career Builder.

For employers, “it’s a buyer’s market,” says Todd Steen, an economist at Hope College in Holland, Mich.

And for some workers, it can be an opportunity to switch to a new career, says Marni Bobich, a human resources specialist at Administaff, an HR outsourcing firm.

Bill Smith swallows his pride

But for many, silver linings are hard-won.

Take Mr. Smith: He and his family live about a 90-minute drive outside New York City. Three years ago he was laid off from a profitable home healthcare firm where he was a director of human resources. He was unemployed for six months. At first he enlisted the help of headhunters to find a comparable job as a manager or director in human resources. After all, he had plenty of years of experience and a master’s in education and guidance counseling.

But by the time his benefits ran out – and with car loans, a mortgage, health insurance, and a daughter in college – he swallowed his pride and took a position packing food in a refrigerated warehouse. He figured he might be able to work his way up from the $12-an-hour position. Then the business closed.

“It used to be that when looking for a job, you’d try to get in at entry level, stay a couple of years, and then move up the ladder,” says Albert Williams, an economist at Nova Southeastern University in Fort Lauderdale, Fla.

“Now the whole system has gotten clogged up from the top on down. Move up? Well, in this economy people just aren’t moving up,” says Mr. Steen of Hope College.

Smith next worked part time as a substitute teacher and did clerical work for a law firm. But even when there were no holidays and he was able to work five days a week, his income didn’t supplant what he had earned on unemployment.

But he did have a job.

That is something, Mr. Williams says. “Whenever you’re working you’re getting more experiences, you’re getting trained in new ideas. And that keeps you sharper and ready to move on than if you were not working at all.”

After about a year of working part time, Smith secured a steady job as a training specialist with a social-services firm. Though his salary is less than half of what he was making at the beginning of the recession, he does have health insurance, for which he is thankful.

Learning to prioritize

His journey has taught his family how to prioritize expenses. Instead of buying spaghetti sauce, they make it.

That said, a lot has been cut out of their lives. The Smith family doesn’t go out to the movies. Smith says he can’t remember the last time they went out to dinner. He makes his morning coffee at home rather than spend $2 for a cup on the road, and he’s strategic about where he buys gasoline. They keep the thermostat at 60 degrees throughout the winter.

Mr. Masten, who works as a cashier at a local gas station to supplement his income, says his new attention to tracking money is one upside to his story. Another? “I am also much more active physically and spiritually. I take better care of myself and I give of myself more than ever. And my son gets that as a role model – of someone who rises from the ashes, rather than give up.”

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