For millions, underemployment is a new normal

At 4.3 percent, the unemployment rate is at its lowest level since 2001. But left out of this figure are people who are working part time or fewer hours than they desire — – the underemployed. NewsHour Weekend’s Christopher Booker reports on how the underemployed are struggling in the U.S. economy.

By Christopher Booker and Connie Kargbo

CHRISTOPHER BOOKER: Laymondra Brewer-Thomas’ work wasn’t always this steady. Before starting as an assistant manager at this Chicago Walgreens, making ends meet meant working an exhaustive number of hours between two jobs, one at McDonald’s, the other at women’s clothing store Layne Bryant.

LAYMONDRA BREWER-THOMAS: My schedule was all over the place. Between 32 to 40 hours with McDonald’s. Lane Bryant, I wanna say maybe 20 hours out of the week. So I was juggling both jobs at the time. It was stressful. It was overwhelming at times, because I wasn’t where I wanted to be.

CHRISTOPHER BOOKER: Brewer-Thomas’ work situation exemplifies a new normal for millions of American workers, underemployment.

The national unemployment rate has dropped from its great recession peak of ten percent to 4.3 percent. But if you include people who have stopped looking in the last month or those involuntarily working only part-time, you get the nation’s underemployment rate. It was 17.1 percent at the peak of the recession. Today it is at 8.4 percent.

Bob Bruno is a labor and employment relations professor at the University of Illinois.

BOB BRUNO: While it’s true that the unemployment rate has been halved, and that’s all to the good, to some degree it really is masking some real difficulty that workers are having out there in the economy.

CHRISTOPHER BOOKER: In Illinois, the underemployment rate is one of the highest in the country, averaging 10.3 percent since last year.

That’s something Ronald Jackson knows all too well. The 54 years-old, Illinois native feels he has many more years of work left in him, the problem is finding a company willing to give him a full-time job.

CHRISTOPHER BOOKER: How stable has it been for you?

RONALD JACKSON: You don’t know if you will be there one minute, or the next because they can say, ‘Well, we only need you for one week.’ Most of the workers doesn’t, they can’t plan. They just have to go day by day, and hopefully that, you know, they’re still working.”

CHRISTOPHER BOOKER: Currently in between jobs, Jackson spent much of 2016 in a patchwork of jobs. This past fall, Jackson was working at this pallet supply company earning $350 every week with no benefits. That job ended after three months.

RONALD JACKSON: Most jobs will not even hire you for a full 40 hours. They’ll give you 25 hours. And who’s gonna wanna work for 25 hours and that’s right is bus fare already gone. After you take out the taxes. So there’s not saying that there’s jobs out here. Where? I mean, people wanna work, but if I’ma work, I need 40 hours.

BOB BRUNO: Part-time used to be temporarily, and it used to be a gauge. People start back to work part time. It builds into full time. People who want full time can find it. And people who stay part time are voluntarily choosing to be in that. But we’re finding that’s not the reality anymore.

CHRISTOPHER BOOKER: How does this impact the economics of a working family?

BOB BRUNO: There is nothing but insecurity. There’s instability constantly. You can’t feel comfortable at any point in time with the hours you’ve been assigned or the income you’ve earned. Because it’s never enough. How a middle class emerges out of this population really is an open question.

CHRISTOPHER BOOKER: That question led Laymondra Brewer-Thomas to Skills for Chicagoland’s Future, a public-private partnership that works with the more than 50 Chicago area companies, like Walgreens and Chase bank to fill vacancies with qualified, unemployed, or underemployed job seekers.

Marie Lynch is the group’s CEO.

How common is Laymondra’s story?

MARIE LYNCH: Very common. On an annual basis , we find about 35 percent of the 1,100 people we serve are underemployed, the folks who are either not working full time or are working at a wage or type of job that was less than they previously were at prior to the recession.

CHRISTOPHER BOOKER: Shortly after connecting with Skills for Chicagoland’s Future, Brewer-Thomas got her interview with Walgreens.

Today, she’s relieved to be working there full-time with health care benefits and a retirement plan, with the goal of becoming a store manager.

LAYMONDRA BREWER-THOMAS: It’s a lot more challenging now to actually find employment and to find employment that may be best suited for your needs.

CHRISTOPHER BOOKER: Did you feel beforehand that you had a jobs network or an employment network that you could tap into?

LAYMONDRA BREWER-THOMAS: No. It was a struggle. Talking to individuals I went to school with, friends and colleagues and etcetera. A lot of them were in the same boat that I was in at the time, and are still in the same boat that I previously was in.

CHRISTOPHER BOOKER: Has there been a systemic shift in the way that companies manage their workforce? Is this emphasis on a part-time, scalable workforce something that’s shifted within management thinking?

MARIE LYNCH: I think that there has been some structural changes to how they’re approaching work, you know? And to what I saw early on was really an attempt to manage risk and to be cautious as they were, you know, coming out of that recession.

CHRISTOPHER BOOKER: For companies, managing risk means managing labor costs, including the number of hours people work and many companies have adopted computer software to help them do that.

Dayforce is a program used by about 3,500 companies, like retailers Guitar Center and Sephora.

John Orr is a Senior Vice President of Ceridian, the company behind the software.

JOHN ORR: It really optimizes, who they put where, when and what skills and information they need.

CHRISTOPHER BOOKER: He says Dayforce enables employers to quickly respond to shifts in their respective markets and adjust to their employees’ needs.

JOHN ORR: What we have done is we have come to the market with Dayforce that allows the business side to optimize its people, in part-time or shorter hour increments but at the same time to allow the employee to get the hours. If they’re only allowed to get 15 hours in this location but they can get another 15 at another location and the employee wants 30 hours, our system is smart enough to know how to do that.

CHRISTOPHER BOOKER: This flexible scheduling ability came as the retail industry – which employs over 3 million people in America has increasingly relied on part-time workers.

Mark Cohen used to be the CEO of Sears in Canada and is now an industry consultant and Columbia University business school professor.

MARK COHEN: You need somebody to open the door in the morning someone to lock the door at night. But you really want to staff your physical space when the customers shopping and to the degree that folks have been able to predict that. That’s been the basis for increased part-time employee.

CHRISTOPHER BOOKER: Is there evidence that productivity increases if you have workers that are working at 30 or fewer hours a week. Or is productivity higher if workers are in a full-time capacity?.

MARK COHEN: This is a difficult, difficult issue. There’s no formulaic solution. There are organizations that hold their full time employees dearly. And so they pay the price of a dip in business, and they keep those folks employed. There are other folks who track on a more point to point basis they fire and hire, and I think they’re probably characterized as penny wise and pound foolish. They appear to be operating more efficiently but they pay an enormous cost in hiring retraining and turnover.

CHRISTOPHER BOOKER: With retail stores struggling against competition from internet shopping, Cohen predicts increased instability for those employed in the retail sector.

MARK COHEN: So, right now you can shop online with a keyboard and I would say in a couple of years you’ll start shopping online with a headset that lets you walk through a store whether it’s real or virtual point to something that interests you pick it up virtually and then decide to buy it.

CHRIS BOOKER: Really represents a dark shadow for the person that works in a mall or the floor of a clothing store?

MARK COHEN: Absolutely.

CHRISTOPHER BOOKER: Do you think, had you not found Skills for Chicagoland’s Future, you would be where you are?

LAYMONDRA BREWER-THOMAS: I’m not sure. It’s definitely put me at a different level. I could still be juggling between two jobs or still attempting to find something that’s better suited for my needs and wants. And my career path in general. So I know I would keep pushing but, you know, I’m not sure.