-- The number of people marginally attached to the labor force is high;
-- Major increase in rates of depression and social withdrawal;
-- Rising suicides;
-- Increase in early retirements;
-- Americans are angrier than they were a generation ago.
One labor economist who has studied this closely is Dartmouth professor David Blanchflower. The former member of the Bank of England’s Monetary Policy Committee is the author of a new book, “Not Working: Where Have All the Good Jobs Gone?“
I spoke last month with Blanchflower about his work for a Masters in Business podcast. His conclusion is the U.S. economy is nowhere near full employment. According to him, unemployment can fall by a third from its present levels, closer to 2.5 percent, before we reach full employment. It is an outlier position, but one he backs up with a wealth of data.
In his telling, the underemployed today include those who might be working fewer hours than they would like. Then there are those with multiple part-time jobs and working as many as 80 hours a week, but because they are not with a single employer, they receive no retirement plan or health-care benefits. The gig economy was supposed to create lots of well-paying, independent jobs; these Uber expectations have been dashed by the reality of long hours, mediocre pay and no benefits.
The shift to lower wage jobs for entire groups of workers is similarly problematic. Working full time while earning much less than in the past has profound ramifications. Entire industries have been disrupted, and often employees find taking a new job in a different sectors leads to near-entry-level pay -- equivalent to a 30, 40, even 50% salary cut. These folks may be working full time but they clearly are underemployed relative to their experience, skills and past work. This is not captured in economic data.
Blanchflower explains how underemployment manifests itself in a variety of data points outside traditional economic measures. He notes that the plight of the underemployed is contributing to widespread despair, a worsening drug epidemic, and increased suicide rates. These were memorably highlighted in the research of Nobel winning economist Angus Deaton and his wife, Anne Case, who documented the rise of "death of despair" among working class whites. Blanchflower even ties the phenomenon of underemployment to the rise of far-right populism, both in the U.S. and Europe.