5 Reasons Why You're Underemployed

Underemployed young graduates kruger

It is estimated by researchers, that one in ten American workers are underemployed. Are you part of this statistic? Then you really need to read this.

Underemployment is defined as holding a job that does not use your skill-set and experience to its fullest capacity. And unfortunately in this post-recession economy underemployment has become the norm for many members of the job market. There are many reasons why someone might choose to apply for a job that is below their skill level and experience; some of those reasons are a bit more valid than others.

Underemployment can have a crippling effect on motivation, self-worth and can even cause depression. Although not initially evident the effects can also influence the economy at large, because underemployment weakens what is called the Consumer Class. The Consumer Class is a group of individuals that hold the buying power of the economy by purchasing goods and services beyond their basic necessity. Stifling this segment of the economy can have a chain reaction, as seen in the sluggish movement of the real estate market across the country. So if it has such a terrible effect, why are you still underemployed?

1. Looming student loans

Pretty barmaid wiping down barShutterstock

This is especially true for young graduates just entering the job market. A whopping 69% of these new employees enter the job market with an average financial burden of $28.950 and in many cases, those loan repayment periods begin immediately after graduation. This forces many graduates to take a job, any job when they leave school, with very little negotiating power due to their circumstances. Compounding this situation are many of the people that lost their jobs, sometimes even ending long careers that were forced to take employment anywhere they could.

The best way to avoid this is not to avoid it at all, your immediate financial needs are important but treat the job that you take out of necessity as a transitional position. Keep active within your professional network, try to increase visibility within your industry and continue expanding your list of contacts in the field. This can be a laborious process, but it will give you a conduit to focus your experience, skills and energy on that you might have in surplus due to underemployment and under implementation.

2. No exit


Mobility is critical when trying to avoid underemployment, especially in the dynamic and very mobile “new economy”. Unfortunately, this movement has fallen to the wayside in place of job security. Upwards professional mobility is still slightly restricted causing people of middle and upper management to keep their jobs for longer. This, in turn, creates a stagnant job market, without the ability for parallel let alone upward career moves. Not only is this situation damaging to the economy, see section regarding the consumer class, it also is infinitely frustrating for someone that has the credentials and drive to be promoted but isn’t due to the lack of higher positions. If this phenomenon is extremely pronounced, it can result in disgruntled and disengaged employees.

But not all is lost. Many young recently graduated individuals and even veterans from various industries have found opportunities in the new freelance market, where the only standard you are held to for advancement is your own. Many people are opting to work independently, or work as independent contractors, with estimates showing that up to 40% of the population will be either contract, freelance or self-employed workers by 2025. If those percentages seem a little abstract, here are some numbers to illustrate the scale of this phenomenon: one million self-employed individuals were added to the freelance market from 2014 to 2015, and that trend doesn’t seem to be slowing down in 2016.

3. Skills vs salary

on railsShutterstock

This is arguably one of the most dangerous paths to go down, the one that sees you getting regular pay increases but not expanding your knowledge base or enriching your professional experience. Although dramatic, many people have gone down this path, but few have returned. The reason being, it’s easy to become complacent, especially if you are getting paid to do so. The riskiest result of this is not complacency, though; it is the mental doldrums that it brings with it. Being stuck in a position exclusively because of the financial benefits will stifle your need to learn, evolve and innovate.

This is probably the reason many people are foregoing traditional employment, with stable salaries to venture out into the market as independent contractors, outside advisors and freelancers. All of these jobs require high awareness of the trends going on around you to remain competitive and a thirst for personal enrichment. It’s a constant struggle but a struggle with yourself and your skills, not a struggle due to external stimuli.

I think I should say this, though, getting a pay raise at regular intervals, doesn’t mean that it will stifle your personal and professional development. The situation that I am postulating on above has to do with workplaces that are so “on rails” that no matter what you do or how you act, you will still get paid. This, in turn, has the possibility of making you complacent and restricting your professional development.

4. Used as opportunity

You might be underemployed just because your options are limited, due to experience, knowledge or skill-set. Instead of waiting until you gain the necessary experience to transition into the position you feel will fully utilise your skill-set, actively pursue other things that will make you a better candidate.

One of the best pieces of advice I have is looking at what your local community college offers. Since we are only talking about knowledge acquisition community colleges offer the best value for your money. And unlike traditional Universities that usually only offer courses that count towards a degree, community colleges often have special units specifically for continuing learning or the acquisition of skills. If you can’t find something at the local community college, you might want to consider shadowing someone in your company, on your own time of course.

5. Voluntarily underemployed

Female Barista smilingShutterstock

Finally, there is the part of the underemployed population that finds themselves there by choice. Due to many global situations, tragedy and economic ruin, they prefer to have a better work-life balance, than endless job opportunities and the responsibilities that come with them. Comically if you search for “intentionally underemployed” the results you get are from divorce cases in which the person paying child support voluntarily undergoes under-employment to lower their income and thus their court mandated payment. Which is fraudulent and unethical but still a reason someone might choose to be underemployed.

But, we won’t be concentrating on the second case, though. We are interested in people that seek a better quality of life even though this means being underemployed. Of course, this is an immense balancing act, because quality of life is also strongly correlated with your employment and how happy you are in the workplace. One of the key factors of being happy in the workplace is engagement (even though the majority of the population is disengaged).

Are you underemployed or underemployed in the past? What did you do to break away from it? Is there any advice that you would like to share with our readers? Let us know in the comment section below!