03 October 2011

The Plight of the Under-Employed in 2010

For many people, the concept of employment seems straightforward.  If a person receives an income from work, he is employed; otherwise, he is unemployed.

In practice, not many people are familiar with how employment, unemployment and under-employment are measured.

What does being employed mean?

According to the guidelines recommended by International Labour Organisation, a person is employed if (among other things) he performed some work for pay, profit or family gains during a specified full calendar week.  For operational purposes, the notion of "some work" is usually interpreted as work for at least one hour.

Working as little as one hour (or even five or ten hours) in a week is fine if it is due to personal choice e.g., students, home-makers or the semi-retired working part-time because of personal commitments such as studies or minding children or preference.

But there are other people who work part-time for economic reasons (that is, not by choice) and are available for, but cannot find, more hours of paid work.  The fewer hours they work, the less they see themselves as being employed.

Governments consider these people to be under-employed, which is a sub-set of the employed.

As at June 2010, 176,700 residents were part-time employed (defined as anyone working less than 35 hours a week), constituting 9.0 per cent of the resident workforce.  Of these, 86,600, or 4.4 per cent of the resident workforce, were under-employed.

The US includes its under-employed in alternative, more comprehensive measures of unemployment (U-6, the combined unemployment and under-employment rate was 16.7 per cent in December 2010, compared to U-3, the official unemployment rate of 9.4 per cent).  It recognises that the under-employed are inadequately employed.

Most of our under-employed residents had a monthly income from work of $1,200 or less.

They are almost indistinguishable from the 262,700 full-time employed residents with a low monthly income from work of $1,200 or less, except in one significant regard — they represent an under-utilised productive capacity of the employed population, and have the potential and the willingness to work more, contribute more and earn more, if only they had the opportunities.

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