CHAPTER
9

Employed, Unemployed, Underemployed

In This Chapter

• The cyclical job market
• Looking at employment, unemployment, and underemployment
• How to ask your boss for more money
• Feeling out the job market
• Sticking with the job you have

Not everyone agreed, but at the start of 2016, many people felt jobs and the economy were moving in the right direction in the United States. That’s good news because it’s been a very long haul financially for a lot of people.

After the first quarter of 2016, the unemployment rate was down to 5 percent from 10 percent in October 2009. And reports from the U.S. Department of Labor showed that the number of jobs was on the rise and wages were increasing slightly—all factors that were encouraging people who have been out of work for a while to start applying for jobs again. That’s good news for an economy and job market that has been shaky for years.

The Ups and Downs of the Job Market

The American economy is cyclical. It experiences highs, then lows, and then rebounds back again. The public’s confidence in the economy—called consumer confidence—dips and rises along with the movement of the economy.

Definition

Consumer confidence is a measure of how consumers feel at a given time about the current state of the economy.

The early 1980s and the early 1990s were periods of recession in the United States, and consumer confidence was very low. Then, with the booming stock market fueling the economy during the mid- and late 1990s and into the new century, consumer confidence rose sharply. It slipped again, however, after the first half of 2000, when the economy began to slow down and hundreds of thousands of jobs were eliminated.

The September 11 terrorist attacks caused the already-faltering U.S. economy to slow down even more, taking consumer confidence down along with it. Then we saw economic turnaround when the United States invaded Iraq in March 2003, expecting a short engagement from which we would emerge as victors, which, of course, didn’t happen. Still, the stock market hit an all-time high in October 2007, but, as you know, that wouldn’t last.

The Great Recession officially started in December 2007, wreaking havoc with the economy. The recession lasted for 18 months, although the effects were felt for much, much longer and linger even today.

All this economic uncertainty had—and still has many people, including those in their 20s and 30s—understandably nervous. Many baby boomers who were nearing or at retirement age during the recession delayed retirement, holding on to the higher-paying jobs that in better economic times would have been passed along to younger workers. Many people were out of jobs, and although the economy has improved significantly, many are still working jobs for which they’re overqualified because of lingering economic uncertainty.

Maybe you graduated from college and didn’t have any trouble landing a high-paying job as an engineer or computer systems analyst. But if you find yourself in a situation thinking that maybe you’re lucky to have your job—even if it isn’t that great—try not to be discouraged. Remember that the market is cyclical and has always rebounded from the dips it’s taken in the past.

Money Pit

In 2015, the millennial generation represented about 40 percent of all unemployed people in the United States, with 13.8 percent of those between 18 and 29 out of work. Unemployment rates were much higher for those without college degrees than those who did have degrees. The good news, however, is that those rates are declining, and economists are hopeful that the trend will continue.

So what does it mean to be employed, unemployed, or underemployed? The first two are pretty easy to understand. Being employed means you have a job for which you are paid to do. If you don’t have a job, you are unemployed and you don’t work. But when you look a little more closely, the situation gets more complicated, and those terms may not mean what you think they do.

The U.S. Bureau of Labor Statistics (BLS) reported that 8 million Americans were unemployed after the first quarter of 2016. Of that number, 2.2 million—more than a quarter—were long-term unemployed.

In addition to those unemployed workers, more than 6 million Americans were employed part-time for economic reasons. This refers to workers who want to work full-time but are not because their hours were cut back or they can’t find full-time jobs. So these people are working but not in the situation they’d prefer.

Another 1.7 million people were reported as marginally attached to the labor force. They’re not working, but they’re not considered unemployed because they hadn’t looked for work in the 4 weeks before the government conducted the employment survey. Of that 1.7 million people who are not working but are not counted as unemployed, about a third had stopped looking for work because they believed there were no jobs available for them. Others weren’t looking for work because of different reasons, like illness, school, or family responsibilities.

On top of all that, nearly 15 percent of all workers surveyed in a Gallup poll reported that they were underemployed, which means they’re working in a job that does not pay much or does not require their skill level.

Definition

Long-term unemployed refers to people who have been out of work for 27 weeks or more. Employed part-time for economic reasons refers to people who want to work full-time but can’t find full-time jobs. Marginally attached to the labor force refers to people who aren’t working but aren’t considered unemployed because they haven’t looked for work within 4 weeks. Underemployed refers to people who are skilled but working in low-paying or unskilled jobs.

When you break it down, employment and unemployment are a lot more complicated than they first appear. Let’s take a look at where you may fall on the employment-unemployment-underemployment continuum.

Exploring Your Options

Let’s say you graduated from college 3 years ago, and after a year and a half of freelancing, landed a job with a mid-size marketing firm. You’re currently earning a yearly salary of about $33,000.

Although $33,000 sounds like a lot of money—and it is—we all know money goes fast, and there are a lot of things to spend it on. Hardly anyone who works thinks he or she makes enough money, even if you’re grateful to have gotten a position in your field. It’s no surprise that the most frequent complaints about jobs are not about bosses (although those probably run a close second) but about salaries.

If you have a job you like, but not the salary you’d like, you do have some options:

• You can (gulp!) ask for a raise.
• You can look for a higher-paying job.
• You can stay in the job you have and hope you’ll advance or be able to move on as employment opportunities continue to improve.

Of these choices, the first two are definitely more proactive and require more courage than sticking it out and seeing what happens. It takes a fair amount of guts to march (or tiptoe) into your boss’s office to ask for a raise, especially when many employers are still wary about the economy. And it takes a lot of energy to start a job hunt, especially if it hasn’t been very long since you’ve been through one and you know competition for jobs is tough.

If there’s an indication that there’s room for advancement in your current job, the best thing to do might be to hang out, do your very best, and see what happens. But if your salary is so low you can’t get by, or if you’re forced to live paycheck to paycheck without being able to save a cent, you might have to take some action.

Asking for a Raise

If your plan is to ask for a raise, be sure you’re in a position to do so. Obviously, if you’ve only been working for your company for a few weeks or months, you won’t endear yourself to anyone by asking for more money. Or if the company is going through some lean times, which many firms still are, your boss isn’t going to be at all happy when you saunter in and ask for more money.

Also consider your market value. Never go to your boss and complain that the guy in the next cubicle is making more than you are for doing the same job. Bosses hate knowing employees talk about their salaries, and opening that kind of conversation definitely won’t put you in his or her good graces. Instead, if you know you’re underpaid, point out what other people who are doing your job on the open market are making.

Dollars and Sense

Trade publications and some professional associations do regular salary surveys and can be good sources of information. Or you can use Monster’s salary tool to calculate what you make and see how that compares to others in similar jobs. Find it at career-advice.monster.com/salary-benefits/salary-information/salary-tools/article.aspx.

Looking for Another Job

If you’re really unhappy with your job and your salary and know there’s no chance for a raise anytime soon, you might be tempted to go out and look for another job. If that’s the case, what kind of job should you look for?

Over the last decade or so, employers in some fields have become less likely to insist on a particular degree for a particular job. They’re more likely to look for someone who is smart, versatile, willing to work, and able to work independently. If that sounds like you, it might give you a lot more flexibility if you decide to job hunt. Don’t feel that you’re stuck in a particular field just because that’s what your degree or certification is in. You may be able to go from one career to another that interests you without much difficulty.

Whereas we once looked to big corporations for good jobs and job security, predictions are that small businesses, which can act quickly to implement new ideas and technology, will become increasingly important as employers. And guess who is starting many of these small businesses that are going to be so important? A survey released in 2015 by Bentley called millennials the true entrepreneur generation, with almost two thirds stating that their goals include starting their own business at some point.

The BLS reports that the number of self-employed young Americans is increasing and is expected to continue to grow. So don’t neglect the small businesses when conducting your job search. Who knows? You may get inspired to create one of your own.

If you can’t reconcile your salary problem, looking for another job might be the answer. Just be careful of inadvertently putting yourself into a worse situation than you are in now, either by jeopardizing your current position or rushing into another job that turns out to not be the position you expected.

Pocket Change

It’s estimated that the average worker has about 11 jobs and 3 careers over his or her working life.

Staying Where You Are

If you can’t get a raise in your current job and you’re not inclined to go looking for a new one, your only choice is to stick it out. This might be your choice for several reasons.

Maybe you have a job you love that just doesn’t happen to pay very much. Certain professions—social work and childcare, for instance—are notoriously low paying. Nobody going into these fields expects to get rich, but thankfully, dedicated people are willing to do these kinds of very important, but underpaid, jobs. If you have a low-paying job you love, you’ll have to decide if you want to stay where you are. If you decide to keep it, you’ll have to adjust your standard of living to mesh with your earnings.

Do keep in mind, however, that not all nonprofit or not-for-profit organizations offer only low-paying jobs. According to PayScale, Inc., the median salary for a development coordinator with between 5 and 9 years of experience who works for a nonprofit is $51,200. Could you make more than that in the private sector? Maybe. But some nonprofits offer generous benefits to make up for the lower pay.

If, on the other hand, you’re staying in a low-paying job because you’re too scared or unmotivated to go after a better one, you’re dealing with a different issue. Reread the previous section about the job market, and give it a shot. You’ve got nothing to lose but a low-paying job.

The Least You Need to Know

• The job market tends to be cyclical, so be patient if you’ve been unable to find the job you want because of a current tight market.
• A low national employment rate doesn’t tell the whole story about who’s working and who’s not.
• If you’re dissatisfied with your salary, you need to decide what you’re going to do about it.
• Asking for a salary increase isn’t easy, but it could reap financial rewards.
• Sometimes it’s smart to stay with the job you have, especially if there’s room for advancement.