Growing Disparities in Data: The Implications of Narrow Measures on Workers Paid Low Wages
Researchers, advocates, policymakers, and government agencies all rely on data to improve the socioeconomic outcomes of working people. Without comprehensive measures, it becomes difficult to gauge the growing challenges facing historically marginalized populations like low-wage workers. Crafting policies to improve their well-being becomes even harder. Even some of our most reliable data sources have their shortcomings — limitations that could have lasting implications on real people and in most cases, some of the most disparate.
For the U.S. Bureau of Labor Statistics (BLS), these limitations can be found in their measure of “underemployment.” A new report, The Involuntary Part-time Work and Underemployment Problem in the U.S., provides a new, more comprehensive measure of underemployment than what the BLS measure suggests. With a broader, and more inclusive underemployment indicator for part-time workers, the paper reveals higher levels of underemployment than previously thought. Further, it shows barriers to work are disproportionately higher for Black and Latinx workers, young workers, and among certain low-wage occupations. Given the alarming rates of underemployment under this broader measure, policymakers must advance solutions that support working people and their families especially during the current economic recession due to the ongoing COVID-19 pandemic.
What is underemployment?
The BLS measures underemployed workers using an indicator called ‘part-time for economic reasons.’ This group represents workers who are part-time but who want, and are available to work, full-time hours. Although the BLS indicator is the most consistent indicator for underemployment available, narrow measures could have acute implications for underserved workers who typically represent underemployed workers.
Generally speaking, underemployed workers are disproportionately represented in low-wage industries and tend to be workers of color, particularly Black workers. Following the Great Recession of 2008, underemployment was high for many years, peaking at 6 percent in 2009. However, during the economic recovery that followed and before the economic devastation of the COVID-19 pandemic, U.S. underemployment saw a gradual drop. It reached as low as 4 percent in 2016. But new research using a broader measure of underemployment reveals a gloomier picture of underemployed workers and the economy overall.
New research: True underemployment is higher than federal measures indicate
The recent paper by economists Lonnie Golden and Jaeseung Kim reports that the rate of underemployment was actually almost twice as high as what BLS data suggested in 2016, at 8-11 percent. They derived this data point by broadening the underemployment measure to include any part-time worker who prefers more work hours, rather than limiting the measure just to those who want full-time hours. By widening the scope of the measure, the authors found a fuller image of this problem, including:
about 4 in 10 part-time workers were underemployed;
part-time workers with variable work hours are twice as likely to be underemployed as their peers with stable schedules; and
Black and Latinx part-time workers have some of the highest rates of underemployment, at 14 and 12 percent, respectively.
Underemployment is likely going to rapidly increase due to the pandemic-induced recession. Millions of workers have lost their jobs, and there has been an unprecedented hike in the number of workers employed part-time, but are available, or want, to work full-time hours. This new, inclusive measure shows that the rate of underemployment for part-time workers is likely to be just as high as the rate of unemployment.
Advance policies to improve the lives of people who are underemployed
This new measure of underemployment affirms the desperate need for comprehensive, worker-friendly policies. To better support workers and their families, policymakers must:
increase the federal minimum wage to $15 through federal policies like the Raise the Wage Act.
The ongoing pandemic exacerbates the need for these and other policies that would help ensure economic security, stability, and safety for so many workers paid low wages.
The limitations in our federal data have painted a skewed portrait of our economy. The workers who fall between the cracks of the data sources we rely on to shape and inform policy are some of the most marginalized in our economy. Yet they are central to the policy changes necessary to our fight against poverty and economic inequality. We must continue to advocate for broader research methods to ensure they are not rendered invisible within our data. And as the pandemic continues, we urge decisionmakers to advance comprehensive policies that strengthen our country’s safety net for workers earning low wages, who are a critical part of our economy.