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Underemployment: the hidden face of the youth employment crisis

In Catch22's first roundtable on underemployment, participants discussed the definition, who it affects and how. Director of Communications, Melissa Milner, summarises some key aspects of the discussion.

13 May 2022

Catch22 is bringing together employability experts, businesses, youth employment champions and job seekers in a series of roundtables to explore the subject of underemployment.

With the UK’s unemployment rate sitting at a record low of 3.8% , youth employment at 11.6% (lower than pre-pandemic), and record numbers of job vacancies, it’d be logical to think that all is rosy when it comes to the job market. But scratch beneath the surface and the story is far more complex.

Defining underemployment

That complexity manifests itself in what is termed ‘underemployment’ – sometimes defined as the ‘underuse of a worker’ – where someone is in a job, but it may be unstable, low paid, present few opportunities and the employee feels undervalued.

The ONS has recently started using the Labour Force Survey to measure underemployment. Latest figures show at the end of 2021, underemployment rates were estimated to be just over 7%. In order to be classed as underemployed people must have been looking for an additional job, a job with longer hours to replace their main job or be wanting to work longer hours in their current job.

Who is affected?

There is no age breakdown for underemployment within the ONS data, but anecdotal evidence and assumptions based on the sectors and roles young people tend to enter, means its highly likely the number of young people who are underemployed is disproportionately high.

Underemployment can mean different things to different people. In reality, the definition is personal; for some, it’s feeling that they’re in a role unsuited to their skillset, for others it’s not being able to work the number of hours they desire. Other people may feel they’re undervalued. For some, a zero-hours contract when they want and need more certainty, constitute underemployment.

And quite often underemployment can become a vicious cycle; those affected take on extra jobs in order to supplement income, reducing the amount of time and mental capacity that they have to seek out more suitable employment.

Why are they affected?

There are many reasons why someone may find themselves underemployed, including lack of social capital, lack of emotional support and lack of a financial safety net. These contributory factors can be exacerbated by geography – if a person lives somewhere remote with poor digital access or poor transport links, this can further hinder their chances of finding sustainable work.

Added to this, many people, particularly young people, don’t necessarily know their rights in the workplace or know what a ‘good’ job looks like and what to expect from an employer. This can easily lead to being trapped in a cycle of underemployment with no obvious way out.

The impact of underemployment

Many of the people that we support through our employability programmes at Catch22 have at some stage of their working lives been underemployed. One of our flagship employability programmes, Horizons, is one of the first programmes to directly address the issue of underemployment – with 10% of current participants falling into this category.

Two Horizons participants spoke eloquently about how underemployment has affected them. They talked of being demoralised and demotivated as they sought to find roles that suited their skillset, passions and needs. They highlighted the difficulty in demonstrating experience for a role – when many work experience placements themselves, and some entry level jobs, seem to require a certain level of experience. It was clear from their experience that being underemployed is incredibly hard work – often taking on extra jobs to boost income, embarking on training courses to ‘skill up’ for roles and of course the endless cycle of application forms and interviews. All this while maintaining the day job.

A fresh approach

Our subsequent roundtables will explore what can we done to tackle underemployment, but as we concluded this first session we began to touch on solutions. There was agreement that much more should be done to make jobs in sectors where there are vacancies – and in particular those growth sectors such as green jobs, tech, hospitality and social care – attractive to young job seekers. It is not enough to assume people will take just any job – and even if they are forced to, it is unlikely they’ll stick at it for long or be fulfilled.

An active and engaged workforce is the basis of a healthy job market, a healthy economy and ultimately a healthy nation. But achieving that is going to require a fresh approach to tackling underemployment.

With thanks to participants from Institute of Employment Studies, The Princes Trust, Youth Employment UK, The Health Foundation, West Midlands Combined Authority, Investment20/20


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