Tough times for the nation’s underemployed

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The nation’s January unemployment rate of 9.7% is bleak, but bleaker still is a report out from Gallup this week that the underemployment rate is nearly twice that. About 19.9% of the workforce is underemployed, Gallup says, meaning they work part time but want to work full time.

There are obvious downsides to a high underemployment rate. One in five people is underemployed. Those who are have a harder time coming up with the money to pay their bills and might come closer to defaulting on their mortgages, leading to more foreclosures throughout the country.

But the Gallup data also indicate that widespread underemployment might make an already sluggish recovery even slower. The underemployed spend a third less per day than the employed, $48 per day versus $75 per day. Only 28% of underemployed people say they can make a major purchase, such as a car or home repair, if needed. And only 56% of the underemployed say they are able to afford basic necessities.

An economic recovery in Southern California depends partly on a nationwide increase in consumer spending, which will increase traffic in the region’s ports and in the logistics industry in the Inland Empire. But the Gallup data indicate consumer spending might return more slowly than expected. Underemployed people were more likely to report they didn’t have enough money for food, shelter or healthcare at some time in the last 12 months. Without the cash for necessities, it’s unlikely they’ll be buying cars, electronics or other goodies anytime soon.

-- Alana Semuels